TMI Blog2018 (6) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT credit - the case is entirely different and do not apply to the present case. The penalty was wrongly imposed under Section 11AC - appeal allowed - decided in favor of appellant. - Appeal No. E/85245/2018 - Order No. A/86433/2018 - Dated:- 17-5-2018 - Hon ble Mr. Ramesh Nair, Member ( Judicial ) Shri Rajesh Ostwal, Advocate, for appellant Shri M. R. Melvin, Superintendent (AR), for respondent ORDER The present appeal is filed by the appellant only for waiver of penalty imposed under Section 11AC of the Central Excise Act, 1944. 2. The facts of the case are that the appellant has availed cenvat credit in respect of common input service. Apart from the sale of their manufactured goods, they are also doing the trading activity of boughtout items. The case of the department is that the appellant was supposed to reverse the cenvat credit under Rule (3A) of the Cenvat Credit Rules, 2004 attributed to the trading activity being an exempted service. The demand of cenvat credit was confirmed and a penalty of equal amount was imposed under Section 11AC. The learned Commissioner (Appeals) upheld the order-in-original. Therefore, the appellant is before me. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have carefully considered the submissions made by both the sides and perused the records. I find that in the present case, the demand is under Rule 69(3A) of the Cenvat Credit Rules, 2004, which reads as under:- (3A) For determination of amount required to be paid under clause (ii) of sub-rule (3), the manufacturer of goods or the provider of output service shall follow the following procedure and conditions, namely :- (a) the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely :- (i) name, address and registration number of the manufacturer of goods or provider of output service; (ii) date from which the option under this clause is exercised or proposed to be exercised; (iii) description of inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services and description of such exempted goods removed and such exempted services provided; (iv) description of inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible common credit shall be deemed to be fifty per cent. of the common credit; (v) remainder of the common credit shall be called eligible common credit and denoted as G, where,- G = C - D; Explanation.- For the removal of doubts, it is hereby declared that out of the total credit T, which is sum total of A, B, D, and G, the manufacturer or the provider of the output service shall be able to attribute provisionally and retain credit of B and G, namely, eligible credit and eligible common credit and shall provisionally pay the amount of credit of A and D, namely, ineligible credit and ineligible common credit. (vi) where manufacturer or the provider of the output service fails to pay the amount determined under sub-clause (i) or sub-clause (iv), he shall be liable to pay the interest from the due date of payment till the date of payment of such amount, at the rate of fifteen per cent. per annum; (c) the manufacturer or the provider of output service shall determine the amount of CENVAT credit attributable to exempted goods removed and provision of exempted services for the whole of financial year, out of the total credit denoted as T (Annual) taken dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... succeeding financial year till the date of payment of such amount; (f) the manufacturer or the provider of output service, shall at the end of the financial year, take credit of amount equal to difference between the total of the amount of the aggregate of ineligible credit and ineligible common credit paid during the whole year and the total of the amount of annual ineligible credit and annual ineligible common credit, namely, [{(A+D) aggregated for the whole year)} {A(Annual) + D(Annual)}], where the former of the two amounts is greater than the later; (g) the manufacturer of the goods or the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of payment or adjustment, as per the provisions of clauses (d), (e) and (f) , the following particulars, namely :- (i) details of credit attributed towards eligible credit, ineligible credit, eligible common credit and ineligible common credit, month-wise, for the whole financial year, determined as per the provisions of clause (b); (ii) CENVAT credit annually attributed to eligible credit, ineligible credit, eligible common ..... 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