ORDER : BHARGAV D. KARIA, J. 1. Heard learned advocate Mr.Utkarsh Sharma for the appellant and learned advocate Mr.Ashok Kumar Dhingra with learned advocate Mr.Parva Gupta and learned advocate Mr.Samarth Katare for the respondent. 2. By this appeal under Section 35G of the Central Excise Act, 1944, the appellant- Revenue has proposed the following substantial questions of law arising out of the Judgment and Order dated 08.06.2023 passed by the Customs, Central Excise and Service Tax Appellate Tribunal, Western Zonal Bench, Ahmedabad (for short ‘the CESTAT’) in Excise Appeal No.11050 of 2013-DB which was filed by the respondent being aggrieved by the Order- in-Original/Appeal No.11-12-COMMR-SURAT-II- 2013 dated 29.01.2023 passed by the Commissioner of Central Excise, Customs (Adjudication)-Surat-II : “(a) Whether the Hon'ble CESTAT, is correct in holding that if the assessee reversed/paid proportionate Cenvat credit in respect of common input service used in the manufacture of exempted goods the demand equal to 10% would not sustain. Whether, the proportionate reversal of cenvat by the assessee is proper and admissible ignoring the conditions stipulated under Rule 6(3)(b) of Cenvat Credit Rules, 2004. (b) A significant legal question arises as to whether the Tribunal properly acted as the appellate authority under Section 35C of the Central Excise Act, 1944 because the Hon'ble Tribunal does not explicitly address/verify whether the conditions stipulated under Rule 6(3)(b) of Cenvat Credit Rules, 2004 have been complied with by the assesse. These facts were not addressed in the approach taken by the Tribunal. According to Section 35G of the Central Excise Act of 1944, failing to act appropriately in it's capacity as an appellate authority may be a substantial question of law in and of itself. The Tribunal did not address/verify the terms and conditions stipulated in the Rule 6 of Cenvat Credit Rules, 2004; it failed to act as appellate authority properly. (c) The findings are based on no judgment of higher appellate authority and evidence and/or while arriving at the said finding, relevant conditions stipulated under rules have not been taken into consideration and legal principles have not been followed.” 3. The brief facts of the case are as under : 3.1. The respondent-assessee is engaged in manufacture of excisable goods falling under Chapter Nos. 28, 29, 31 and 38 of the Central Excise Terrif Act, 1985. 3.2. The brief facts of the case are as under : 3.1. The respondent-assessee is engaged in manufacture of excisable goods falling under Chapter Nos. 28, 29, 31 and 38 of the Central Excise Terrif Act, 1985. 3.2. The respondent-assessee was availing Cenvat Credit under the Cenvat Credit Rules, 2004 (for short ‘the Rules’) on Central Excise Duty paid on inputs, capital goods and input services. 3.3. A show-cause notice was issued on 22nd September, 2009 calling upon the respondent- assessee as to why :- “(i) Central Excise duty amounting to Rs.2,98,15,482/- should not be recovered from them under Rule 14 of Cenvat credit Rules, 2004 read with Rule 6(b) of Cenvat Credit Rules, 2004 read with proviso to Section 11A of Central Excise Act, 1944: (ii) Interest at appropriate rate should not be recovered from them under Rule 14 of Cenvat credit Rules, 2004 and or proviso to Section 11AB of Central Excise Act, 1944, on the duty so evaded amounting to Rs. Rs.2,98,15,4821- (iii) Penalty should not be imposed upon them under Rule of 15(2) of Cenvat Credit Rules, 2004 under proviso to Section 11AC of Central Excise Act, 1944.” 3.4. The respondent was also issued second show-cause notice dated 13.05.2010 for subsequent period July, 2009 to December, 2009 for recovery of Central Excise duty amounting to Rs.35,79,520/- for the same cause as mentioned for the first show-cause notice. 3.5. The respondent-assessee by reply dated 11.10.2010 submitted that by Section 73 of the Finance Act, 2010, Rule 6 of the Rules was amended retrospectively in the manners specified in column (3) of the Eight Schedule with effect from 10th September, 2004 to 31st March, 2008. It was therefore contended by the respondent that due to the retrospective amendment of Sub-rule (7) of Rule 6 of the Rules adjustment of credit on inputs or input services used in or in relation to exumpted final products relating to the period from 10.09.2004 to 31.03.2008 was pending on the date on which the Finance Bill receives assent of the President then the manufacturer may pay an amount equivalent to Cenvat Credit attributable to the inputs or input services used in or in relation to the manufacture of the exempted goods before or after clearance of such goods. 3.6. The respondent-assessee was manufacturing Sipton 10L which was exempted. 3.6. The respondent-assessee was manufacturing Sipton 10L which was exempted. The said goods were cleared without payment of duty but neither separate accounts were maintained for duty paid in inputs and inputs services used for manufacture of such exempted goods. The respondent therefore to avoid the litigation, paid the entire amount of cenvat credit of Rs.2,51,134/- vide S.T. Credit register entry No.011 dated 01.10.2010 attributable to the input services used in the manufacture of the said product and also paid interest at the rate of 24% of Rs.2,38,074/- vide PLA Entry No.07 dated 01.10.2010. 3.7. The adjudicating authority, however, accepted the amount attributable of Rs.1,71,95,948/- as demanded in SCN dated 22.09.2009 as far as clearance pertaining to period from September, 2004 to March, 2008 but for the period from April, 2008 to June, 2009, the adjudicating authority held that the respondent was liable to pay 10% amount of value of clearances of the exempted product as per Section 73 of the Finance Act, 2010 was only up to 31.03.2008. The appellant- authority, however, ignored Rule 6(3) of the Rules which has been also amended with effect from 01.04.2008 and the provisions of Section 73 of the Finance Act, 2010 was brought on statute by inserting Sub-rule (7) of Rule 6 of the Rules only with a view to see that the assessees get the option of payment of Cenvat Credit which was attributable to the inputs or inputs services in relation to manufacture of the exempted goods. 3.8. The amended Rule 6 of the Rules with effect from 01.04.2008 reads as under : “RULE 6. Obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services. — (1) The CENVAT credit shall not be allowed on such quantity of input or input service which is used in the manufacture of (exempted goods or for provision of exempted services,] except in the circumstances mentioned in sub-rule (2). Obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services. — (1) The CENVAT credit shall not be allowed on such quantity of input or input service which is used in the manufacture of (exempted goods or for provision of exempted services,] except in the circumstances mentioned in sub-rule (2). [Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared nithout payment of duty under the provisions of that rule.] (2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any inputs or input services, [* * *], and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output ervice shall maintain separate accounts for receipt, consumption and inventory of input and input service meant ir use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable. (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow either of the following options, as applicable to him, namely :- (i) the manufacturer of goods shall pay an amount equal to ten per cent. of value of the exempted goods and the provider of output service shall pay an amount equal to eight per cent. of value of the exempted goods and the provider of output service shall pay an amount equal to eight per cent. of value of the exempted services; or (ii) the manufacturer of goods or the provider of output service shall pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of exempted goods or for provision of exempted services subject to the conditions and procedure specified in sub-rule (3A) Explanation I. - If the manufacturer of goods or the provider of output service, avails any of the option under this sub- rule, he shall exercise such option for all exempted goods manufactured by him or, as the case may be, all exempted services provided by him, and such option shall not be withdrawn during the remaining part of the financial year. Explanation II. - For removal of doubt, it is hereby clarified that the credit shall not be allowed on inputs and input services used exclusively for the manufacture of exempted goods or provision of exempted services.” 3.9. Thus, the respondent-authority has paid the Cenvat Credit along with interest from 2004 to 2010 and the appellant could not have insisted upon payment of 10% amount of the value of exempted goods for the period from 01.04.2008 to June, 2009. 3.10. In view of the above facts, the CESTAT has rightly held as under : “7. We find that the case of the department is that since the assessee has availed the Cenvat credit in respect of common input service used in the manufacture of dutiable and exempted goods, the appellant is required to pay 10% of the value of the goods cleared without payment of duty (exempted goods). From the facts it is undisputed that the appellant have been reversing Cenvat credit proportionate to the credit on input service used for exempted goods along with interest, therefore, first the credit though availed at the time of receipt of input service but after reversal thereof along with interest the position is as if credit was not availed. We are also of the view that Rule6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. We are also of the view that Rule6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. The main objective of the Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in respect of input or input services which are used in or in relation to the manufacture of the exempted goods or for exempted services. If this is the objective then at the most amount which is to be recovered shall not be in any case more than Cenvat Credit attributed to the input or input services used in the exempted goods. Moreover this issue has been consistently considered in various judgments wherein it was held that if the assessee reverse the Cenvat credit in respect of common input service used in the manufacture of exempted goods the demand equal to 10%/5% will not sustain. Therefore, we do not find any merits in the impugned order confirming demand for the period April 2008 to June 2009. 8. In the present case since the Ld. Commissioner has demanded 10% of the value of exempted goods, he has not verified the correctness of actual Cenvat credit attributed to exempted goods as reversed by the assessee. Therefore, only for the purpose of verification of such quantification of reversal, the matter is remanded to the adjudicating authority.” 4. In view of the above findings of facts arrived at by the CESTAT, it is not in dispute that the respondent has reversed the Cenvat Credit proportionate to the credit on input service used for exempted goods along with interest. The credit though availed at the time of receipt of input service but after reversal thereof along with the interest, the respondent never availed the credit. 5. Therefore, as per option given by Rule 6(3) of the Rules which has come into effect from 01.04.2008, the appellant could not have insisted upon the payment of 10% amount of the value of the exempted goods when the petitioner has opted for the reversal of the Cenvat Credit on the input goods and services used for the exempted goods along with the interest. Merely because the respondent has reversed such credit in the year 2010, the appellant-Revenue cannot insist upon payment of 10% amount of the value of the exempted goods coupled with the facts that the respondent has paid interest at the rate of 24% per annum on the amount of reversal of the Cenvat Credit on 01.10.2010 which is not in dispute 6. In view of such findings of fact arrived at by the Tribunal, we are of the opinion that no question of law much less any substantial question of law arises from the impugned order of the CESTAT. The appeal therefore fails and is accordingly dismissed.