2023 (9) TMI 1188 - AT - Central Excise

Reversal of proportionate Cenvat credit - inputs used and attributed to Sulphuric Acid cleared under exemption Notification No. 4/2006-CE dated 01.03.2006 (Sr. No. 32) on nil rate of duty - HELD THAT - As per the definition of exempted goods in Rule 2(D)(d)of Cenvat Credit Rules, 2004, the exempted goods is not only the exempted by notification but also the goods bear a nil rate of duty also. Therefore, in our prima facie view the Rule 6(3) is applicable, even in a case of kind of this case. However, in one of the judgments in the case of DHARAMSI MORARJI CHEMICAL CO. LTD. VERSUS COMMR. OF C. EX., RAIGAD 2010 (3) TMI 561 - CESTAT MUMBAI the revenue s appeal is pending before the Hon ble Supreme Court. Therefore, it will be in the interest of justice that this matter maybe finally decided only after the Hon ble Apex Court delivers its judgment in Dharamsi Morarji chemical Co. Ltd. Accordingly, the impugned order set aside and the matter remanded to the Adjudicating Authority for passing a fresh order after the decision of the Hon ble Supreme Court in the case Dharamsi Morarji chemical Co. Ltd. Appeal is disposed of by way of remand to the Adjudicating Authority.

Summary

Issues involved:
Whether the appellant is liable to reverse the proportionate Cenvat credit of inputs used and attributed to Sulphuric Acid cleared under exemption Notification No. 4/2006-CE dated 01.03.2006 on nil rate of duty.

Comprehensive details of the judgment:

Issue 1: Liability to reverse Cenvat credit on inputs used in exempted goods

The department contends that the appellant must pay an equal amount of Cenvat credit on inputs used in Sulphuric Acid cleared under exemption. The appellant argues that the goods were cleared following specific conditions and procedures, making them not exempted goods. The appellant relies on various judgments to support this argument.

Issue 2: Interpretation of Rule 6(3) and applicability of exemptions

The revenue asserts that Rule 6(3) does not provide exceptions for exemptions based on certain conditions. The appellant's reliance on past judgments is challenged, stating that they are not directly applicable due to changes in definitions and rules. The tribunal acknowledges the applicability of Rule 6(3) to goods with a nil rate of duty, but notes a pending appeal related to a similar case.

Judgment:

After considering both sides' submissions, the tribunal finds that past judgments may not directly apply due to rule changes. However, due to a pending appeal before the Supreme Court related to a similar case, the tribunal decides to set aside the impugned order and remand the matter for a fresh decision post the Supreme Court's judgment. The appeal is disposed of by way of remand to the Adjudicating Authority.

*(Pronounced in the open court on 11.09.2023)*