2018 (5) TMI 2188 - AT - Central Excise

Cenvat Credit availed by the assessee and utilized in the manufacture of dutiable as well as exempted final products - Rule 6(3) of the Cenvat Credit Rules - HELD THAT - It is found that the appellants stand that they had maintained separate Cenvat accounts does not stand considered in detail by the lower authorities. Further even after the appellant has reversed the proportionate credit after the clearance of the exempted goods it has to be held as if no credit was ever availed by them. In such a scenario it is deemed fit to set aside the impugned orders and remand the matters to original adjudicating authority for fresh consideration. Inasmuch as the matter stands remanded other issues would also be re-considered by the adjudicating authority. The appeal is allowed by way of remand.

Summary

The judgment from the Appellate Tribunal, CESTAT Allahabad, presided over by Mrs. Archana Wadhwa, addresses the issue of Cenvat Credit availed by the assessee for the manufacture of both dutiable and exempted final products. The Revenue raised a demand under Rule 6(3) of the Cenvat Credit Rules, challenging the appellant's handling of Cenvat accounts. The appellant claimed to have maintained separate accounts for dutiable and exempted goods and asserted that they reversed the credit on common inputs used for exempted products.The appellate authority noted the lack of evidence showing that the appellant reversed the proportionate Cenvat Credit before clearing exempted goods. However, Mrs. Wadhwa found that the appellant's claim of maintaining separate accounts was not thoroughly considered by the lower authorities. She stated that if the appellant reversed the proportionate credit after the clearance of exempted goods, it should be treated as if no credit was ever availed.Consequently, the impugned orders were set aside, and the matter was remanded to the original adjudicating authority for fresh consideration, including other related issues. The appeal was allowed by way of remand, and the COD application was disposed of.