2021 (8) TMI 174 - AT - Central Excise

CENVAT Credit - exempt goods - whether the appellant is required to pay 10% of value of exempted goods in terms of Rule 6(3) of Cenvat Credit Rules 2004? - HELD THAT - There is no dispute about reversal of credit on input services attributed to exempted goods. It is also observed that appellant have paid Cenvat credit and wherever there is delay in such payment the appellant paid interest. In this position it should be considered as if the appellant have not availed Cenvat credit. Accordingly Rule 6(3) of Cenvat Credit Rules 2004 shall not be invoked. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the appellant is required to pay 10% of the value of exempted goods in terms of Rule 6(3) of Cenvat Credit Rules, 2004.

Analysis:
The appellant, represented by Shri Amal Dave, argued that they have been consistently paying the proportionate Cenvat credit related to exempted goods along with interest for any delays. It was contended that the demand for 10% of the value of exempted goods under Rule 6(3) of Cenvat Credit Rules is not valid. Reference was made to previous decisions by CESTAT in the appellant's own case to support the argument, highlighting that the demand was time-barred due to the extended period involved. Judgments such as M/s. P&B Pharma Limited CESTAT Ahmedabad order, Star Agriwarehousing & Collateral Management vs. CCE & ST, Jaipur, and others were cited to strengthen the case.

The Revenue, represented by Shri Rakesh Bhaskar, reiterated the findings of the impugned order without providing new arguments or evidence to counter the appellant's submissions.

Upon reviewing the arguments and records, the Tribunal noted that there was no dispute regarding the reversal of credit on input services linked to exempted goods. It was observed that the appellant had consistently paid the Cenvat credit and interest for delays, essentially treating it as if they had not availed the credit. Consequently, Rule 6(3) of Cenvat Credit Rules, 2004 was deemed inapplicable in this scenario. The Tribunal referenced a previous order in the appellant's own case from 2010 where a similar issue was decided in favor of the appellant, leading to the setting aside of the impugned order and allowing the appeal.

Based on the precedent set by the previous decision in the appellant's case, dated 26.08.2010, the Tribunal set aside the impugned order and allowed the appeal, concluding the matter in favor of the appellant. The judgment was pronounced in open court on 04.08.2021.