Cenvat credit reversal under Rule 6(3A) applies only to common input services, not exclusively dutiable services.

Rule 6(3A) of the Cenvat Credit Rules, 2004 was read harmoniously with Rule 6(3)(ii) to limit reversal only to credit attributable to exempted services. Input services used exclusively for taxable or dutiable output are not to be included in the reversal base, because the formula applies only to common input service credit. The substituted sub-rule was treated as clarificatory, and the earlier view was followed that "total Cenvat credit" in the computation refers only to common input service credit. On that basis, the demand could not be sustained.

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Issues: Whether, for computing reversal under Rule 6(3A) of the Cenvat Credit Rules, 2004, the total credit should include input services exclusively used for dutiable services or only common input services.

Analysis: The relevant scheme under Rule 6 permits credit reversal only to the extent attributable to exempted services. The formula under Rule 6(3A) was read harmoniously with Rule 6(3)(ii) so that credit exclusively relatable to taxable or dutiable output is not reduced or reversed. The substituted sub-rule was treated as clarificatory, and the Tribunal followed the earlier view that "total Cenvat credit" in the formula means only common input service credit.

Conclusion: The reversal computation must exclude input services exclusively used for dutiable services and apply only to common input service credit; the demand could not be sustained.

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