Newsprint in reels falls within Rule 6(3)(a)(v), so attributable credit reversal applies instead of the residual payment.

Newsprint in reels was treated as covered by Heading 48.01 and, on that basis, within Rule 6(3)(a)(v) of the Cenvat Credit Rules, 2004. The Tribunal accepted that newsprints in reels and rolls were synonymous in dictionary usage and ISI standards, so the Department's distinction was rejected. As a result, only reversal of attributable credit was required and the residual 8%/10% payment under Rule 6(3)(b) was not applicable, making the demand and penalty unsustainable.

---

---

Issues: Whether newsprint in reels was covered by the expression "newsprints in rolls or sheets" in Rule 6(3)(a)(v) of the Cenvat Credit Rules, 2004, so that only reversal of attributable credit was required and the 8%/10% amount under Rule 6(3)(b) was not payable.

Analysis: Newsprint in reels was treated as falling under Heading 48.01 of the First Schedule to the Central Excise Tariff Act, 1985. The Tribunal followed its earlier view that, once the exempted goods are classified under Heading 48.01, they fall within Rule 6(3)(a) and not Rule 6(3)(b). It also noted that newsprints in reels and newsprints in rolls were regarded as synonymous in dictionaries and by ISI standards, and therefore the Department's distinction was not accepted.

Conclusion: Newsprint in reels was held to be covered by Rule 6(3)(a)(v) of the Cenvat Credit Rules, 2004, and the demand under Rule 6(3)(b) was held not sustainable, in favour of the assessee.

Final Conclusion: The demand and penalty based on Rule 6(3)(b) could not stand, and the assessee was entitled to consequential relief.

Ratio Decidendi: Where exempted goods are classifiable under Heading 48.01 and are covered by the relevant exemption entry, reversal of attributable credit satisfies Rule 6, and the percentage-based liability under the residual clause does not apply.

---