TMI Blog2023 (9) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... VATE LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2023 (6) TMI 543 - CESTAT CHENNAI] where it was held that Total Cenvat Credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and will not include the Cenvat credit on input/input service exclusively used for the manufacture of dutiable goods. If the interpretation of the Revenue is accepted, then the Cenvat credit of part of input service even though used in the manufacture of dutiable goods, shall stand disallowed, which is not provided under any of the Rule of Cenvat Credit Rules, 2004. Similar view was taken by the Tribunal in the case of AAVANTIKA GAS LTD VERSUS COMMISSIONER, CGST- INDORE [ 2023 (1) TMI 505 - CESTAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in respect of common inputs used for production of electricity which has been sold to Tamil Nadu Electricity Board. The department was of the view that while applying the formula under Rule 6 (3 A) of CENVAT Credit Rules 2004, the appellant ought to have taken the total credit instead of total common input credit. As per the direction of the audit team, the appellant reversed credit to the tune of Rs.65,24,669/- under protest. Later, they filed an application dated 28.08.2014 (which was received by the department on 01.09.2014) seeking permission to take recredit of this amount contending that they have applied the formula correctly and that the amount reversed as per direction of audit team is in excess of the actual amount that they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recredit of the excess credit reversed. Show Cause Notice has been issued alleging that the formula is to be applied by taking the total credit availed by the appellant and not the total common input credit availed. 4. The learned counsel submitted that the issue stands covered by the decision of the Tribunal in the case of M/s. Toshiba JSW Power System Pvt. Ltd. 2023 (6) TMI 543 as well as the decision in the case of M/s. Aavantika Gas Ltd. (2023 1 TMI 505). 5. The learned counsel argued that the appellant having originally reversed the credit as per provisions of law by correctly applying the formula, the department ought not to have insisted on reversing further amount. The request of the appellant to take re-credit ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled the appellant is not eligible for recredit / refund. The claim of the appellant for interest on the excess credit reversed by them is therefore not sustainable. The learned AR prayed that the appeal may be dismissed. 8. Heard both sides. 9. The foremost issue that comes up for consideration is whether the formula applied by the appellant for reversing the proportionate credit availed on common input services used in production of the exempted product (electricity) is correct or not. It is brought out from the Show Cause Notice that the appellant has calculated the proportionate credit that has to be reversed by applying the total common input credit in the formula under Rule 6 (3 A). The department is of the view that the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only to the exempted goods are provided. As per clause (b)(ii) (iv), it is clearly provided that entire credit in respect of receipt and use of inputs/input service is allowed when such input and input service is used in dutiable final products and taxable service. However, nowhere in Rule 6 it is provided that the input or input service used in dutiable goods shall not be allowed. The Revenue is only interpreting the term total Cenvat credit provided under the formula. If the whole Rule 6(1), (2) and (3) is read harmoniously and conjointly, it is clear that Total Cenvat Credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and will not include the Cenvat credit on input/input servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. 15. After appreciating the facts and applying the decision of the Tribunal in the above cases, we are of the considered opinion that the demand confirmed alleging that appellant has adopted incorrect formula requires to be set aside. The demand therefore cannot sustain and we set aside the same. 10. Similar view was taken by the Tribunal in the case of M/s. Aavantika Gas Ltd. (supra). After appreciating the facts and following the decisions as above, we are of the considered view that the proportionate credit reversed by the appellant originally is correct and therefore the amount reversed as per direction of the audit team on 20.7.2013 is excess reversal made by the appellant. The appellant is therefore eligible for recred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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