Appeal partially granted, penalty set aside, matter remanded for duty liability determination. Detailed reasoning provided.

The Tribunal partly allowed the appeal, setting aside the penalty and remanding the matter for determining the duty liability for the normal period. The decision provided detailed reasoning for each issue raised in the case, ensuring a comprehensive analysis of the legal aspects involved.

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Issues:
1. Applicability of Rule 6(2) of the CENVAT Credit Rules, 2004 for maintaining separate accounts.
2. Demand of CENVAT Credit availed on input services used in the manufacture of exempted products.
3. Extended period of limitation for demanding CENVAT Credit.
4. Inclusion of attributable credit in respect of electricity to the exempted turnover.
5. Penalty under Section 11AC of the Central Excise Act, 1944.

Analysis:

Issue 1: Applicability of Rule 6(2) of the CENVAT Credit Rules, 2004
The appellant, engaged in manufacturing dutiable and exempted products, faced a Show Cause Notice for not maintaining separate accounts as required under Rule 6(2) of the CENVAT Credit Rules, 2004. The dispute revolved around the usage of common inputs in manufacturing both types of products.

Issue 2: Demand of CENVAT Credit on Input Services
The Show Cause Notice demanded the amount equal to the attributable CENVAT Credit availed on input services used in the manufacture of exempted products. The appellant contested the notice, citing bona fides and challenging the demand based on the period of limitation, as they argued that periodic audits by the Revenue indicated awareness of their activities.

Issue 3: Extended Period of Limitation
The appellant argued against invoking the extended period of limitation, presenting evidence of Revenue's knowledge of their activities since 2005. The retrospective amendment to Rule 6 was highlighted, leading to the reversal of CENVAT Credit for exempted goods. The Tribunal remanded the matter to determine the duty liability for the normal period.

Issue 4: Inclusion of Attributable Credit in Respect of Electricity
The Tribunal referred to a previous case to uphold the liability of the appellant to pay an amount for the electricity not used within the factory for production. The decision was made against the appellant on this issue.

Issue 5: Penalty Imposition
Regarding penalty imposition, the Tribunal considered past litigation and Supreme Court judgments to waive the penalty imposed under Rule 15. Mitigating factors applied, leading to the setting aside of the penalty imposed under Rule 15.

In conclusion, the Tribunal partly allowed the appeal, setting aside the penalty and remanding the matter for determining the duty liability for the normal period. The decision provided detailed reasoning for each issue raised in the case, ensuring a comprehensive analysis of the legal aspects involved.

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