TaxTMI 
TaxTMI 
2017 (1) TMI 231
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....cturing units located in UP. It was paying excise duty on sugar and molasses after utilizing cenvat credit on inputs/input services. In the process of manufacturing sugar and molasses, bagasse has been produced. A part of such baggase is consumed captively for generation of electricity by the appellant. However, it was selling part of bagasse and electricity generated in its units. Since these are non-excisable goods, it did not reverse any common input credit attributable to them. 3. The appellant had received several show cause notices demanding 10% of the value of bagasse and electricity under Rule 6 (3A).When Finance Act, 2010 , introduced a provision in Section 6 of Cenvat Credit Rules, 2004, allowing reversal of credit along with pay....
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....ionate reversal of cenvat credit attributable to input and input services in or in relation to manufacture of exempted product. This option stands extended in the Rule in addition to option of payment of an amount equal to 5% of the value of the exempted goods. The appellant in the present case has chosen to reverse an amount attributable to input and input services proportionately as per Rule 6(3A) of the Cenvat Credit Rules, 2004. In the impugned orders, the Commissioner has taken the view that the appellant should have reversed the cenvat credit @ 5% of the value of exempted product. The reason given by the Commissioner for not accepting the proportionate reversal made by the appellant is that the appellant has failed to exercise option ....
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....he appellant to avail a particular option. In the present case admittedly it is appellant who have on their own opted for option provided under Rule 6(3)(ii). The meaning of the option as argued by the Ld. Sr. Counsel is that option of right of choosing, something that may be or is chosen, choice, the act of choosing . From the said meaning of the term option , it is clear that it is the appellant who have liberty to decide which option to be exercised and not the Revenue to decide the same." 9. In the light of the above decision of the coordinate Bench we find that the Commissioner is not justified in insisting that appellant reverse cenvat credit in terms of Rule 6(3)(i) of Cenvat Credit Rules. The claim of the appellant is that they hav....