2016 (12) TMI 1533 - HC - Service Tax

Reversal of credit - Rule 6(3)(b) of the CENVAT Credit Rules, 2002 - Held that - considering the fact that while passing the impugned judgement and order the learned tribunal has relied upon the decision of the Larger Bench of the learned tribunal in the case of Nicholas Piramal (India) Limited 2008 (4) TMI 744 - CESTAT, MUMBAI , which subsequently has been reversed / set aside by the Hon ble Bombay High Court in the recent decision COMMISSIONER OF C. EX., THANE-I Versus NICHOLAS PIRAMAL (INDIA) LTD. 2009 (8) TMI 224 - BOMBAY HIGH COURT , the impugned judgement and order passed by the learned tribunal cannot be sustained and the same deserves to be quashed and set aside and is accordingly quashed and set aside. The benefits of amended Rule 6 of the CENVAT Credit Rules, 2002, amended by Finance Act, 2010, which is reported to be amended retrospectively w.e.f. 1/3/2002 is concerned, considering the decision of the Division Bench of this Court in the case of Shree Rama Multi Tech Ltd. 2011 (2) TMI 575 - GUJARAT HIGH COURT , it is observed that if the respondent makes an application within a period of one month from today with supporting documents for getting benefits of amended Rule 6 of the CENVAT Credit Rules, 2002, as amended by Finance Act, 2010, the same be considered in accordance with law and on merits and in light of the amended Rule 6 of the CENVAT Credit Rules, 2002, as amended by Finance Act, 2010. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
1. Interpretation of Rule 6(3)(b) of the CENVAT Credit Rules, 2002 regarding payment on exempted goods.
2. Validity of the tribunal's decision on subsequent reversal of CENVAT credit taken.

Analysis:
1. The appellant challenged the tribunal's order requiring payment on exempted goods under Rule 6(3)(b) of the CENVAT Credit Rules, 2002. The court noted that the tribunal relied on a decision later overturned by the Bombay High Court. Consequently, the court held that the tribunal's order could not be sustained and was quashed.

2. The respondent argued that an amendment to Rule 6 of the CENVAT Credit Rules, 2002 by the Finance Act, 2010 allowed retrospective benefits from 1/3/2002. The respondent, however, failed to approach the appropriate authority within the specified time frame. Citing the Shree Rama Multi Tech Ltd. case, the court allowed the respondent to apply within one month with supporting documents for benefits under the amended rule. The court directed the consideration of the application in accordance with the law and merits of the case.

In conclusion, the appeal was allowed to the extent mentioned, with no order as to costs.