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TMI Blog2023 (12) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT Credit Rules, 2004, along with interest as applicable, and imposed penalty of like amount under rule 15 of CENVAT Credit Rules, 2004 even while dropping the demand for recovery of Rs. 19,53,96,311/-. 2. The appellant had been manufacturing goods and also undertake trading in goods and the dispute pertains to the credit availed on 'input service' alleged to have been deployed in common that was attributable to the latter. The primary objection of central excise authorities appears to have been that the pro-rata adjustment, undertaken by the appellant, is not in conformity with rule 6 of CENVAT Credit Rules, 2004 and that the adjustment for reversal done on annual basis should, in fact, have been undertaken every month. According to Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rease the burden on the other unexempted class of tax-payers and should be construed against the subject in case of ambiguity. It is an equally well-known principle that a person who claims an exemption has to establish his case. Indeed, in the very case of M/s. Parle Exports (P) Ltd. relied upon by Sri Narasimhamurthy, it was observed : "While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided." The choice between a strict and a liberal construction arises only in case of doubt in regard to the intention of the Legislature manifest on the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the prescription in rule 6(3) of CENVAT Credit Rules, 2004 pertaining to consequence of non-maintenance of separate records. The appellant contends that they were in conformity with rule 6(2) of CENVAT Credit Rules, 2004 inasmuch as they had segregated the utilization of common 'input services' between excisable goods and exempted services. We find that the Tribunal, in re Star Agriwarehousing & Collateral Management Ltd, has held that '8. We have heard the rival contentions and are of the view that it is a matter of record that the appellant have been providing both taxable and exempted output services in respect of which they have been availing credit of common input services. It is also a matter of record that the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te reversal of the Cenvat credit has taken place, that tantamount to not availing of the input services credit of the common inputs which are going into the exempted services. While holding this view we take shelter of the decision of the Hon'ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. v. Collector of Central Excise, Nagpur - 1996 (81) E.L.T. 3 (S.C.). 10. We also take note of this Tribunal's decision on the same issue in case of M/s. The Oberoi Rajvilas v. Commissioner of Central Excise, Jaipur reported under 2018 (5) TMI 1715 - CESTAT New Delhi, the relevant extract of same are reproduced here below :- "9. From the above, we note that the appellant has followed the proportionate method for availment of credit on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. We also find that since the issue regarding reversal of Cenvat credit under Rule 6(3) is contentious and various cases on the same issue have been made out which can be seen from such of judgment given above, therefore, on the issue related to Rule 6(3) particularly in the facts of the present case it cannot be said that the appellant had mala fide intention to evade payment of duty. Therefore, demand for the extended period is also hit by limitation for the same reason the penalties imposed are also unsustainable.' 7. In re Reliance Media World Ltd, it has been held '7. It is appropriate that we look at the provisions of the Cenvat Credit Rules, 2004 in the context of its intent. Doubtlessly, every provider of output service or manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State of Jammu and Kashmir. In such a situation, there is no logic or soundness to hold that the inputs/input services used for rendering 'broadcasting service' should be restricted to such as evidenced to have been used for rendering service in the rest of India. In these circumstances the availment of the Cenvat credit to the full extent cannot be questioned. Its utilisation thereof cannot also be restricted. 9. If the output services were to be distinctly identifiable as one which is exempt (other than territorially) in contradistinction with a taxable service and if the input/input services were distinctly divisible, though not procured separately, the provisions of Rule 6 of Cenvat Credit Rules, 2004 would come into play. As t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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