Tribunal allows appeal on CENVAT credit for common input services, citing incorrect disallowance of credit for dutiable goods.

The tribunal set aside the adjudicating authority's decision confirming a demand for availing CENVAT credit on common input services without separate accounts. The appellant's contention of already reversing the credit and exercising the option for proportionate reversal was considered, leading to the appeal being allowed with consequential benefits in line with a recent CESTAT order emphasizing that disallowing CENVAT credit on input services used in dutiable goods was incorrect.

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Issues:
1. Availing CENVAT credit on common input services without separate accounts.
2. Demand raised under Rule 6(3) based on audit note.
3. Appropriation of reversed credit against the demand.
4. Confirmation of demand by adjudicating authority.
5. Exercise of option under Rule 6(3A) for proportionate reversal.
6. De novo adjudication confirming demand for disputed period.
7. Analysis of recent order by Ahmedabad Bench of CESTAT.
8. Disallowance of CENVAT credit on input services used in dutiable goods.
9. Delay in exercising option and proportionality of demand.
10. Setting aside of impugned order and allowing the appeal.

Analysis:
1. The appellant availed CENVAT credit on common input services used for both manufacturing dutiable goods and trading activities without maintaining separate accounts, leading to a demand based on Rule 6(3) for the difference value of sales.
2. The demand was proposed under Rule 6(3) without further investigation, and the adjudicating authority confirmed a significant amount payable under Rule 6(3)(i) for the period in question, appropriating the reversed credit against the demand.
3. The appellant contended that they had already reversed the CENVAT credit and exercised the option under Rule 6(3A) for proportionate reversal, which was considered during de novo adjudication.
4. The de novo Order-in-Appeal confirmed a demand for the disputed period, citing the appellant's previous reversal of the demanded amount and the timing of payment after exercising the option under Rule 6(3A).
5. The appellate tribunal analyzed a recent order by the Ahmedabad Bench of CESTAT, emphasizing that CENVAT credit on input services used in dutiable goods should not be disallowed, contrary to the Revenue's interpretation.
6. The tribunal found the issue in the present case aligned with the above ruling, emphasizing that the demand for delay in exercising the option was disproportionate and set aside the impugned order, allowing the appeal with consequential benefits as per law.

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