2018 (12) TMI 159 - AT - Central Excise

CENVAT Credit - manufacture of taxable as well as exempt goods - packing materials used commonly for both types of scented supari, which is exempt by N/N. 25/2006-CE dated 20.03.2006 - Rule 6 (3) of Cenvat Credit Rules, 2004 - Held that - While observing that the dispute can be settled in the light of the amended provisions of Rule 6 (3), it is noted that the computation of the amount liable to be paid as claimed by the appellant, has not been verified by the Department. In terms of amended provisions of Rule 6 (3), the appellant is required to support the claim of such amount with a Certificate from the Cost Accountant/Chartered Accountant. It is appreciated that the appellant did not get an opportunity to provide such Certificate from the Cost Accountant. The matter is remanded to the adjudicating authority for denovo decision after considering the claim of the appellant if duly supported by the Certificate - appeal allowed by way of remand.

Summary

Issues:
- Challenge to Order-in-Original regarding duty demand, interest, and penalty
- Availment of Cenvat credit on packing materials for both dutiable and exempted goods
- Amendment to Cenvat Credit Rules post-show-cause notice issuance
- Dispute regarding the amount of Cenvat credit availed
- Applicability of retrospective amendment in Section 73 of the Finance Act, 2010
- Requirement of Cost Accountant/Chartered Accountant Certificate for Cenvat credit claim

Analysis:
The appeal challenges the Order-in-Original dated 31.12.2009 concerning duty demand, interest, and penalty. The appellant, engaged in manufacturing pan masala and scented supari, cleared goods based on Retail Sales Price (RSP) rates specified in Notification No.25/2006-CE. The dispute arose as the appellant availed Cenvat credit on packing materials used for both dutiable and exempted goods. The Department issued a show-cause notice demanding payment under Rule 6 (3) of Cenvat Credit Rules, 2004. Post-show-cause notice, amendments were made allowing proportionate payment under Rule 6 (3) and providing an option to finalize disputes under Section 73 of the Finance Act, 2010.

The appellant argued that subsequent amendments covered their case, and they had already reversed Cenvat credit attributable to exempted goods. The Department acknowledged the amendments but contested the lack of documentary evidence supporting the appellant's claim. The Department cited a decision by the Madras High Court allowing for the production of Cost Accountant Certificate even after the specified time limit. The Tribunal noted the appellant's claim had not been verified and ordered a remand for the appellant to provide the required Certificate for a denovo decision.

In conclusion, the Tribunal set aside the impugned order and remanded the matter for a fresh decision considering the appellant's claim supported by the necessary Certificate. The appeal was allowed by way of remand, emphasizing the need for proper verification and documentation in line with the amended provisions of the Cenvat Credit Rules.