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2024-VIL-1330-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Reversal of Cenvat Credit, Dutiable and Exempted goods, Common Input and Input Services - Appellant is engaged in the manufacture of dutiable goods and also produces Superior Kerosene Oil (SKO) and Liquefied Petroleum Gas (LPG) as by-products, which are exempt from excise duty. The appellant reversed proportionate Cenvat credit on common input and input services used in the manufacturing process in compliance with the provisions of Rule 6 of Cenvat Credit Rules, 2004 - computation of reversal of credit - Whether the reversal of Cenvat credit under Rule 6(3) read with Rule 6(3A) of the Cenvat Credit Rules, 2004 should be computed on the total Cenvat credit or only on the common credit of input and input services used for the manufacture of both dutiable and exempted goods – HELD - for the purpose of reversal of Cenvat credit under Rule 6(3) read with Rule 6(3A), the total Cenvat credit to be considered should be the credit of only the common input and input services used for the manufacture of both dutiable and exempted goods, and not the total Cenvat credit including the credit on inputs and input services used exclusively for the manufacture of dutiable goods - the amendments made to Rule 6(3A) vide Notification No. 13/2016-CE(NT) dated 01.03.2016 clarified that the total Cenvat credit for the purpose of the formula under Rule 6(3A) is only the total Cenvat credit of common input and input services, and not the total Cenvat credit of all inputs and input services - the substituted Rule 6(3A) shall have retrospective effect as it is clarificatory in nature. Accordingly, the appellant has correctly calculated and reversed the Cenvat credit as per the correct interpretation of Rule 6(3) read with Rule 6(3A) of the CCR, 2004 – the impugned order is set aside and the appeal is allowed
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