2024 (9) TMI 920 - AT - Central Excise

Reversal of CENVAT Credit - Liability to pay an amount equal to 6% upon the difference between the sale price and the purchase price of the goods traded - credit on common input service was availed by appellant - such common service was used in the trading of goods as well as manufactured goods cleared on payment of duty - HELD THAT - It is found that the demand of CENVAT Credit was raised which is equal to 6% of difference between the purchase price and sale price of trading goods in terms of Rule 6 (3). However it is also not in dispute that the appellant have reversed the proportionate credit along with payment of interest. Therefore after such reversal and payment of interest for the delayed period i.e. from the date of taking credit till the date of reversal of proportionate credit the demand equal to 6% under Rule 6 (3) shall not sustain as held in numerous Judgments. The demand is not sustainable. Hence the impugned order is set aside - Appeal allowed.

Summary

The Appellate Tribunal CESTAT Ahmedabad ruled that the appellant is not liable to pay 6% on the difference between sale and purchase price of goods when common input service credit was availed. The appellant reversed the proportionate credit and paid interest, making the demand unsustainable. The impugned order was set aside, and the appeal was allowed. (Case citation: TMI)