TMI Blog2017 (2) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... of the President. The appellant has not filed an application for opting to reverse the credit. However, even prior to this amendment, the appellant has reversed the credit - the Department has force upon the assessee to pay 10% of the value of clearances even though the assessee has reversed the credit attributable to the input services used for manufacture of exempted goods. Demand unsustainable - appeal allowed - decided in favor of appellant. - E/342/2011-SM - A/30027/2017 - Dated:- 12-1-2017 - Ms Sulekha Beevi, C.S., Member (Judicial) Shri S. Thirumalai, Advocate for the Appellant. Shri P.S. Reddy, Deputy Commissioner(AR) for the Respondent. [Order per: Sulekha Beevi,] The appellants are engaged in the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of dutiable and exempted goods. However the appellant was not maintaining separate accounts for common input services used in the manufacture of dutiable and exempted services. The appellant however reversed amount of ₹ 1,81,055/- on 17/09/2008, being the credit availed on input services used in the manufacture of exempted goods during the period 2007-08. The said amount was arrived by adopting the formula which was then laid down in the judgment passed by the Tribunal in CCE Mumbai Vs. Philips India Ltd [2006(200) ELT 106 (Tri. Mumbai)] . It is submitted that the very same formula has been adopted in the amendment so brought in the Finance Act, 2010 dt. 08/05/2010. In spite of this, the Department has issued the show-cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utable to the input services used in the manufacture of exempted products, the demand raised by the Department cannot sustain. 3. On behalf of the Department) the learned AR Shri P.S. Reddy submitted that the appellant did not file an option before the jurisdictional Commissioner opting to reverse credit as per the amendment brought forth in the Finance Act for the period prior to 01/04/2008. As the appellant did not file such option, he is bound to pay 10% of the value of the clearances as per Rule 6(3)(b) of the CENVAT Credit Rules. 4. I have heard the submissions made by both sides. At the outset, it has to be stated that the period involved is prior to 01/04/2008 wherein the amendment was brought forth by Finance Act, 2010 by givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cenvat credit attributable to input/input services used in or in relation to manufacture of exempted final product. The proportionate amount of Cenvat credit attributable to the input/input services used in or in relation to manufacture of exempted final product was to be calculated as per the formula prescribed in Rule 6(3A). By Finance Act, 2010, the above provisions were made retrospectively applicable. Hon'ble Gujarat High Court in case of Sh. Rama Multitech Ltd. v. UOI reported in 2011 (267) 153 (Guj.) has held that even if separate account have not been maintained, in view of retrospective amendment by Finance Act, 2010, a manufacturer using common inputs in or in relation to manufacture of dutiable as well as exempted final p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantum of input services used in or in relation to manufacture of exempted final product and by foregoing this credit, they have complied with this obligation. In view of this the impugned order is not sustainable. The same is set aside. The appeal is allowed. 5 Moreover, this Tribunal in the case of M/s. Aster Pvt. Ltd. Vs. CC CE, Hyderabad-III [2016(043) STR 0411(Tri- Hyd)] had occasion to consider similar issue and held as under:- 6. . .. . The above Rule 6(3A) states that while exercising the option, the manufacturer of goods or the provider of output service shall Intimate in writing the department regarding the option exercised. In the present case, admittedly there is no intimation given by the appellant informi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 (Tri. -Mum.)] and Foods , Fats Fertilisers Ltd v. CCE, Guntur [2009 (247) 209 (Tri. -Bang.) = 2011 (22) 484 (Tribunal)] , it has been held that the condition in Rule 6(3A) to intimate the department is only a procedural one and that such procedural lapse is condonable and denial of substantive right for such procedural failure us unjustified. Taking Into account the facts, evidence and following the precedents cited above, I am of the view that the demand raised is not legal and proper. 8. I may now address the alternate plea raised by Revenue to remand the matter for verification/quantification of the proportionate credit that has to be reversed on exercising option Rule 6(3)(ii). It is brought out from records that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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