Tribunal allows CENVAT Credit based on actual usage for manufacturing, exempts exported goods.

The Tribunal ruled in favor of the appellant on all issues raised. It held that the appellant could avail CENVAT Credit based on the actual usage of inputs for manufacturing dutiable and exempted goods, rather than the entire invoice amounts. The requirement for maintaining separate books of accounts for reversing the value of exempted goods did not apply when credit was based on actual usage. The Tribunal also allowed the appellant to avail CENVAT Credit on exempted goods exported under notification No. 24/2010 and clarified that goods cleared under Chapter X procedure are not exempted, hence no reversal of credit was necessary under Rule 6(3)(i) of CCR 2004.

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Issues:
1. Eligibility of CENVAT Credit on inputs proportionate to their use in manufacture of dutiable goods or exempted goods exported.
2. Maintainance of separate books of accounts for reversal of value of exempted goods.
3. Applicability of notification No. 24/2010 for availing CENVAT Credit on exempted goods exported.
4. Clarification on CENVAT Credit for goods cleared under Chapter X procedure.

Analysis:
1. The appellant contested the eligibility of CENVAT Credit on inputs used in manufacturing dutiable and exempted goods. They claimed to avail credit based on the actual consumption of inputs for each type of product. The appellant's method involved recording common inputs in inventory and taking credit only for the portion used for dutiable or exempted goods. The Tribunal noted previous judgments supporting this approach, allowing credit based on actual use rather than entire invoice amounts.

2. The issue of maintaining separate books of accounts for reversing a percentage of exempted goods' value was raised. The appellant argued that they did not avail CENVAT Credit on common inputs, only on the portion used for dutiable or exported exempted goods. Citing relevant case law, the appellant contended that when credit is based on actual usage, the requirement for reversal under Rule 6 does not apply.

3. Regarding the applicability of notification No. 24/2010 for availing CENVAT Credit on exempted goods exported, the appellant relied on a High Court decision stating that credit is available under Rule 6(6)(v) of CCR 2004. The Tribunal considered this argument and found in favor of the appellant, setting aside the demand, interest, and penalties imposed by the adjudicating authority.

4. The Tribunal addressed the issue of CENVAT Credit for goods cleared under Chapter X procedure. Relying on precedent, it was established that such goods are not considered exempted, leading to the conclusion that there is no requirement to reverse credit under Rule 6(3)(i) of CCR 2004. Based on settled legal principles and previous judgments, the Tribunal allowed the appeal, setting aside the impugned order in favor of the appellant.

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