2019 (9) TMI 394 - AT - Central Excise

Reversal of proportionate CENVAT Credit - clearance of liquid oxygen for medical purposes as well as for general purposes - common input services utilized for manufacture of dutiable liquid oxygen as well as exempted goods - Rule 6 of the CENVAT Credit Rules, 2004 - It is the claim of the appellant that they have availed credit on common input services only from January, 2005 whereas the Commissioner s finding is that they have availed credit from September, 2004 onwards. HELD THAT - The learned C.A. in support of their claim that the proportionate CENVAT Credit attributable to exempted products during the relevant period with interest have been paid, placed the certificate issued by the C.A. - It is found from the records that the said C.A. certificate was not placed earlier, hence, we agree with the contention of the learned AR that the correctness of the C.A certificate to be ascertained by the adjudicating authority. The matter remanded to the adjudicating authority to decide the issue afresh taking into account the C.A. certificate vis- -vis the claim of the appellant that proportionate credit attributable to exempted products had been reversed - appeal allowed by way of remand.

Summary

Issues:
- Correct reversal of proportionate CENVAT Credit for exempted products
- Discrepancy in availing CENVAT Credit on common input services
- Remand to adjudicating authority for further assessment

Analysis:
The case involved an appeal against an Order-in-Original passed by the Commissioner of Central Excise, Thane-II, regarding the clearance of liquid oxygen for medical and general purposes, and the availing of CENVAT Credit on common input services for both dutiable and exempted goods. The appellant was alleged to have not followed Rule 6 of the CENVAT Credit Rules, 2004, leading to a demand of recovery of a substantial amount. The appellant contended that they had started availing CENVAT Credit on common input services only from January 2005, while the Commissioner's finding indicated credit availed from September 2004 onwards. The appellant claimed to have correctly reversed proportionate CENVAT Credit attributable to exempted products during the relevant period, supported by a Chartered Accountant's certificate. However, the certificate was not presented earlier, prompting a remand for the adjudicating authority to verify its accuracy.

The main issue revolved around the correctness of the reversal of proportionate CENVAT Credit for exempted products during the relevant period. The appellant argued that they had appropriately reversed the credit, whereas the Commissioner's finding suggested otherwise. The presence of the Chartered Accountant's certificate supporting the appellant's claim necessitated a remand for the adjudicating authority to reevaluate the situation. The correctness of the certificate was deemed crucial for a fair decision, leading to the remand order.

The discrepancy in the availing of CENVAT Credit on common input services also played a significant role in the case. While the appellant asserted that they started availing the credit from January 2005, the Commissioner's determination indicated credit availed from September 2004 onwards. This discrepancy added complexity to the case, highlighting the need for a thorough reassessment by the adjudicating authority to ensure a just outcome based on accurate information and documentation.

In conclusion, the appellate tribunal allowed the appeal by remanding the case to the adjudicating authority for a fresh decision. The remand was deemed necessary to verify the accuracy of the Chartered Accountant's certificate and to address the discrepancies in the availing of CENVAT Credit on common input services. All issues were kept open for further assessment, emphasizing the importance of a comprehensive review to reach a fair and just resolution in the matter.