Common input credit reversal dispute ended after Revenue accepted the assessee's arrangement in connected proceedings.

Where an assessee used common inputs in the manufacture of both dutiable and exempted final products, the dispute concerned reversal or payment linked to exempted clearances under the excise credit framework. The Court noted that the assessee's arrangement had later been accepted by the Revenue in connected proceedings, and the earlier orders relied on also supported that position. In those circumstances, the substantial questions of law on which the appeal had been admitted no longer survived for adjudication, and the questions were answered against the Revenue. The appeal consequently failed.

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Issues: Whether the Revenue's appeal survived after the subsequent acceptance of the assessee's arrangement and the earlier decisions governing reversal of credit on common inputs used in dutiable and exempted products.

Analysis: The assessee manufactured both dutiable and exempted final products and used common inputs in that process. The dispute concerned the manner of reversal or payment of an amount linked to the exempted clearances under the relevant excise credit framework. The later order in connected proceedings, together with the earlier orders relied on by the Court, showed that the arrangement adopted by the assessee had been accepted by the Revenue. In that situation, the substantial questions of law on which the appeal had been admitted no longer survived for adjudication.

Conclusion: The questions were answered against the Revenue and the appeal failed.

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