CENVAT Credit Case: No Legal Basis to Enforce 5% or 10% Duty on Exempt Goods Without Following Rule 6 Procedures.

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....CENVAT Credit - common input services for taxable as well as exempt goods - The demand of the duty amount calculated @ 5% or 10% of the exempted value cannot be made even though the assessee has not followed the prescribed procedures - there is no legal provision under which an amount equal to 5% or 10% of the value of the exempted goods can be recovered. The reason is that payment of an amount of 5% or 10% is one of the choices under Rule 6 and is not a mandatory payment. This choice cannot be foisted upon the appellant nor can such an amount be recovered under Rule 14. - AT....