2018 (12) TMI 1287 - AT - Central Excise

CENVAT Credit - demand of 6% of the value of exempted goods supplied to the subsidiary of BARC - demand confirmed in the absence of certificate required to be produced by the appellant to show that he has actually reversed the CENVAT credit relating to the manufacture of exempted goods which were sold to the subsidiary of BARC - Held that - Since the appellant has produced the certificate which was not there before the Commissioner (Appeals), I remand the case back to the original authority to consider the said certificate to find out the reversal of CENVAT credit attributable to the manufacture of exempted goods - appeal allowed by way of remand.

Summary

Issues:
- Confirmation of demand under Rule 15(1) of CENVAT Credit Rules, 2004
- Requirement of certificate for reversal of CENVAT credit
- Applicability of Rule 6 of CENVAT Credit Rules, 2004
- Production of evidence for reversal of CENVAT credit

Confirmation of demand under Rule 15(1) of CENVAT Credit Rules, 2004:
The appeal challenged an order confirming a demand of ?2,36,480 along with interest and reducing the penalty to ?53,000 under Rule 15(1) of CENVAT Credit Rules, 2004. The appellant, engaged in manufacturing, faced a show-cause notice alleging improper exemption claim under Notification No. 10/1997-CE. The Deputy Commissioner upheld the demand and penalty due to lack of evidence supporting the input breakup for exempted goods. The Commissioner (Appeals) also rejected the appeal for not producing a certificate certifying the reversal of CENVAT credit relating to exempted goods.

Requirement of certificate for reversal of CENVAT credit:
The appellant argued that they had voluntarily reversed ?3446.76 of CENVAT credit related to exempted goods, citing a Supreme Court decision. The appellant presented a certificate from a valuer showing the input tax credit for goods supplied to a subsidiary of BARC. However, this certificate was not submitted to the lower authorities. The absence of this certificate led to the rejection of the appellant's claim. The Tribunal noted the importance of producing the required certificate to prove the reversal of CENVAT credit.

Applicability of Rule 6 of CENVAT Credit Rules, 2004:
The appellant contended that Rule 6 of CENVAT Credit Rules, 2004 was not applicable since they had already reversed the CENVAT credit. The Tribunal emphasized the necessity of complying with the rules and providing the essential documentation, including the certificate demonstrating the reversal of CENVAT credit. The Tribunal highlighted the significance of following the prescribed procedures and furnishing the requisite evidence to support claims.

Production of evidence for reversal of CENVAT credit:
Both parties presented their arguments regarding the necessity of a certificate showing the reversal of CENVAT credit. The Tribunal acknowledged the appellant's submission of the certificate during the appeal hearing, which was not available to the lower authorities. Consequently, the Tribunal remanded the case to the original authority for reconsideration based on the newly produced certificate. The Tribunal emphasized the importance of providing complete documentation to substantiate claims and directed a fresh decision based on the evidence presented during the appeal.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal by remanding the case to the original authority for further examination in light of the newly submitted certificate. The judgment underscored the significance of adhering to procedural requirements and furnishing necessary documentation to support claims in matters concerning CENVAT credit reversal.