10 June 2024


Judgments

Customs, Excise and Service Tax Appellate Tribunal

Commissioner of Central Goods And Service Tax, Customs And Excise vs. Maihar Cement

MANU/CE/0292/2022

31.08.2022

Excise

Rule 6 (3)(i) of Cenvat Credit Rules is not applicable when Appellant has reversed the proportionate Cenvat credit

Present appeals have been filed against common order-in- original by which 10 show cause notices were adjudicated on the common issue whereby the learned Commissioner have dropped the demand for reversal of Cenvat Credit, proposed under Rule 6(3)(b) of Cenvat Credit Rules, 2002/2004.

The show cause notices are misconceived for any demand under Rule 6(3)(b)/6(3)(i) of Rules due to the admitted fact that, the Appellant have admittedly reversed the proportionate credit on input/explosives for limestone cleared from the captive mines to Unit-2. Rule 6 provides for a mechanism to reverse Cenvat credit either proportionately, if it can be calculated, and in the alternative, if the same cannot be calculated with ease, the rule provides for reversal of Cenvat credit taken on common inputs by reversing a specified percentage of the sales/transfer value of the exempted product. Such reversal is restricted to the opening balance of credit in the Cenvat account at the beginning of the period as modified by Cenvat credit taken during the accounting period.

In view of the admitted fact that, the Appellant have reversed the proportionate credit, the facts are covered squarely by the ruling of Supreme Court in the case of Chandrapur Magnet Wires Pvt Ltd. Vs. CCE. The Appellant have reversed the proportionate Cenvat credit in terms of Rules 6 (3)(ii) of CCR, thus, there is no application of Rule 6 (3)(i) of Rules. The situation is wholly revenue neutral, as both the units under common management and ownership are paying duty on their dutiable finished product namely cement and clinker. In case, duty was paid in terms of Rule 6(3)(i) of Rules, the same was available as credit to unit 2 as input credit. There is no merit in the appeals of revenue. Appeals dismissed.

Tags : Demand Deletion Legality

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