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2018-VIL-805-CESTAT-MUM-CE

CENTRAL EXCISE CESTAT Cases

Central Excise - Disallowance of Cenvat Credit which was availed on renting of immovable property where the substantial portion of the premises is being used as a factory and a small portion is being used as depot – HELD - It is not in dispute that out of the total leased area, the appellant has used 93.91% for manufacturing activity and the remaining 6.09% only was used for depot activity - none of the authorities have given any reason as to how the department has quantified the inadmissible Cenvat credit on the basis of ratio of sales turn-over of each activity. The ratio of depot sale to manufacturing sale is applicable when the credit has been held to be inadmissible for the entire premise which was the case of the department in the SCN but same was not accepted by the ld. Commissioner - once the ld. Commissioner has accepted the contention of the appellant then there was no need to go into the ratio of trading activity towards manufacturing turnover – Only 6.09% of the total amount is ineligible for credit since that was used for trading activity and not for the manufacturing purpose. Since the Appellant don’t have any objection about the disallowance of Cenvat Credit on other input services, therefore the same is upheld along with interest and penalty - the impugned order is set aside and the matter is remanded back to the adjudicating authority for the limited purpose of re-quantification of demand, interest and penalty - the appeal is partly allowed

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