2012 (3) TMI 354 - AT - Central Excise

Reversal of CENVAT Credit - Whether the appellant company is correct in reversing the cenvat credit availed on the common inputs which are used in the exempted goods and no further action is required of directing them to pay 8% or 10% of the value of the exempted goods which are cleared from the factory premises - Held that - Appellant had availed the cenvat credit on common inputs and have used them for manufacturing the dutiable goods as well as exempted goods and that the appellant had been reversing the cenvat credit attributable to the inputs which are consumed in the exempted products. The reversal of cenvat credit is not being disputed, accordingly, the issue is now squarely covered by the retrospective amendment carried out by the Finance Act, 2010. As correctly pleaded by the Ld. Counsel, the judgment of the Tribunal in the case of Unimed Technologies Ltd. (2012 (11) TMI 820 - CESTAT, AHMEDABAD) would squarely cover the issue in favour of the assessee - Decided in favour of assessee.

Summary

Issues:
- Whether the appellant company correctly reversed the cenvat credit availed on common inputs used in exempted goods?

Analysis:
1. The judgment by the Appellate Tribunal CESTAT AHMEDABAD dealt with four appeals filed against Orders-in-Original No. 17/MP/VAPI/2007, all arising from the same issue.

2. The main issue revolved around whether the appellant company was correct in reversing the cenvat credit availed on common inputs used in exempted goods without being directed to pay a percentage of the value of the exempted goods cleared from the factory premises.

3. The appellant's counsel argued that the retrospective amendment in the Cenvat Credit Rules, 2002 and 2004 by the Finance Act of 2010 covered the issue. They highlighted that the appellant had been reversing the cenvat credit attributable to inputs used in exempted products in compliance with the law.

4. The Senior Departmental Representative reiterated the findings of the adjudicating authority without presenting any new arguments.

5. Upon reviewing the records, the Tribunal observed that the appellant had indeed availed cenvat credit on common inputs used for both dutiable and exempted goods. The appellant had been correctly reversing the cenvat credit attributable to inputs used in exempted products, which was not disputed.

6. The Tribunal found that the issue was squarely covered by the retrospective amendment brought by the Finance Act, 2010. They also noted that a previous judgment by the Tribunal in a similar case supported the appellant's position. Therefore, the Tribunal concluded that the impugned orders in original were to be set aside, and the appeals were allowed in favor of the appellant.

This comprehensive analysis of the judgment highlights the key arguments, findings, and legal interpretations made by the Appellate Tribunal in resolving the issues raised in the appeals.