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2024 (2) TMI 252 - AT - Central ExciseCENVAT Credit - common input service used for dutiable and exempted goods - liability to pay 5%/6% on the value of exempted goods (i.e. Sodium Chloride salt) in terms Rule 6(3) of the Cenvat Credit Rules, 2004 - HELD THAT - This issue has been considered time and again and in various decision, it has been held that even if the appellant undertakes to reverse the proportionate credit attributed to the exempted goods along with interest even at the stage of CESTAT appeal, the demand of 5%/6% under Rule 6(3) of the Cenvat Credit Rules, 2004 shall not sustain. Since the appellant has undertaken to reverse the proportionate credit of common input service attributed to the exempted goods i.e. Sodium Chloride, the demand of 5%/6% under Rule 6(3) of Cenvat credit Rules, 2004 shall not sustain subject to complying their said undertaking. The appellant also made out a strong prima facie case on the ground of time bar as there appears to be no suppression of facts on the part of the appellant. However, if the appellant reverse the proportionate credit along with the payment of interest, the demand of 5%/6% shall not be sustainable. The appeals are allowed by way of remand to the Adjudicating Authority, to decide a fresh.
Issues involved:
The issue in the present case is whether the appellant is liable to pay 5%/6% on the value of exempted goods (Sodium Chloride 'salt') under Rule 6(3) of the Cenvat Credit Rules, 2004, where Cenvat credit was availed on common input service used for both dutiable and exempted goods. Details of appeals: 1. Appeal No. E/12029/2015-DB, Amount: Rs. 25,45,309/-, Period: July 2009 to June 2012, SCN Date: 08-08-2014, Remarks: Demand issued, Time Barred. 2. Appeal No. E/11700/2016-DB, Amount: Rs. 25,75,828/-, Period: July 2012 to February 2014, SCN Date: 11-09-2014, Remarks: Refund matter. 3. Appeal No. E/12058/2017-DB, Amount: Rs. 5,78,301/-, Period: September 2014 to March 2015, SCN Date: 23-09-2015, Remarks: Refund matter. Appellant's submission: The appellant did not avail Cenvat credit for inputs used in processing Sodium Chloride, stating it involves no cenvatable input. They believed they were not required to pay 5%/6% on exempted goods due to not availing any credit. The appellant is willing to reverse the proportionate Cenvat credit attributed to exempted goods with interest. Legal arguments: The appellant cited various judgments to support their case, emphasizing that if the credit is reversed along with interest, the demand of 5%/6% under Rule 6(3) of Cenvat Credit Rules, 2004 should not be sustained. Revenue's stance: The revenue representative reiterated the findings of the impugned order without additional arguments. Tribunal's decision: After considering submissions and records, the Tribunal found that if the appellant reverses the proportionate credit of common input service for exempted goods, the demand of 5%/6% under Rule 6(3) shall not be sustainable. The Tribunal also noted a strong prima facie case regarding time bar with no suppression of facts by the appellant. The impugned orders were set aside, and the appeals were allowed for fresh adjudication by the Adjudicating Authority. Conclusion: The Tribunal allowed the appeals by remanding the case to the Adjudicating Authority for a fresh decision based on the above terms, emphasizing the importance of complying with the provisions of the law.
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