2012 (6) TMI 846 - AT - Central Excise

Summary

Issues involved: Interpretation of provisions of Rule 6 of CENVAT Credit Rules, 2004 post retrospective amendment, waiver of duty, interest, and penalty.

Summary:
The Stay Petition was filed for waiver of duty amounting to Rs. 4,60,28,278, interest, and an equal amount of penalty. The adjudicating authority confirmed the amounts due to the appellant's non-compliance with Rule 6 of CENVAT Credit Rules, 2004, by not maintaining separate accounts and not reversing the CENVAT Credit as required. The appellant argued that they had already reversed a portion of the credit used for both dutiable and exempted products, citing relevant case law to support their claim. The respondent contended that the appellant had not reversed a specific amount post retrospective amendment and had not addressed the interest liability on the reversed amounts.

Upon consideration, the Tribunal found that the main issue revolved around the interpretation of Rule 6 of CENVAT Credit Rules, 2004 post retrospective amendment. While the appellant claimed to have reversed the entire CENVAT Credit attributable to the input services used for both types of products, the adjudicating authority did not accept this claim entirely. It was noted that a certain amount remained unreversed by the appellant, and interest on this amount had not been addressed. The Tribunal acknowledged the relevance of previous case law but emphasized the need for a detailed examination of the legal issues raised by the appellant during the final disposal of the appeal.

As a result, the Tribunal directed the appellant to deposit Rs. 1 lakh within eight weeks and report compliance by a specified date. Upon compliance, the application for waiver of the remaining amounts was allowed, and recovery was stayed pending the appeal's final disposal.