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TMI Blog2023 (9) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... nts availed CENVAT credit of Central Excise duty paid on inputs, capital goods and service tax paid on input services. During the time of audit an objection was raised, that the appellant has not reversed the correct quantity of credit 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 depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plying the formula using 'total credit taken' instead of "total common input credit taken". Thus, there is an excess reversal to the extent of Rs.65,24,669/- for which the appellant later filed a letter seeking permission to take 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 appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue whether the appellant is liable to reverse the credit by applying total credit 'in the formula provided in Rule 6 (3A) of CCR, 2004 is under challenge in this appeal before the Tribunal. Unless the said issue gets settled 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 Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-rule (2) of Rule 6 is only as an option that if any input or input services used in exempted goods, credit should not be allowed and only with this intention some mechanisms for expunging Cenvat credit attributed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit 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 manufacture of dutiable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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