Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of Ramesh Nair (Judicial Member) and Raju (Technical Member) allowed the appeal in which the issue was that whether the appellant was required to pay 10% of value of exempted goods in terms of Rule 6(3) of Cenvat Credit Rules, 2004.
Counsel appearing on behalf of the appellant, Mr Amal Dave submitted that the appellant had been paying proportionate Cenvat credit attributed to exempted goods from time to time at their own and where there was any delay, interest was also paid. Therefore, the demand of 10% of the value of exempted goods under Rule 6(3) of Cenvat Credit Rules, was not sustainable. Mr Rakesh Bhaskar, Superintendent (Authorised Representative) appearing on behalf of the Revenue reiterated the findings of the impugned order.
The Tribunal hearing both sides found that there was no dispute about reversal of credit on input services attributed to exempted goods. It was also observed by the Tribunal that appellant had paid Cenvat credit and wherever there was delay in such payment, the appellant paid interest and in this position it should be considered that appellant had not availed Cenvat credit. Thus, Rule 6(3) of Cenvat Credit Rules, 2004 shall not be invoked.
The Tribunal allowed the appeal following the decision of this tribunal in the own case of the appellant in P&B Pharma Ltd. CESTAT Ahmedabad order No. A/1344 1345/WZB/AHD/2010 dated 26-08-2010 where it was held,
“4. After appreciating the submissions made by both the sides, we find that the law on the disputed issue is clear by the various decisions referred supra. As regards the fact of reversal of modvat credit, we find from the impugned order in original passed by the Additional Commissioner that the factum of reversal of credit amount relatable to the inputs used in the manufacture of exempted final product stands accepted by him and there is no dispute about the same, in which case there is no need for remanding the matter for verification of reversal amount.In view of the above, the impugned orders have been set-aside and appeals allowed with consequential relief to the appellants.”
[P & B Pharmaceuticals Ltd. v. Commr. Of CE & ST, 2021 SCC OnLine CESTAT 2500 , decided on 04-08-2021]
Suchita Shukla, Editorial Assistant has reported this brief.
