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2023 (10) TMI 425 - CESTAT HYDERABADReversal of CENVAT Credit - exempt turnover - requirement of reversal under clause (i) or (ii) of sub- Rule (3) of Rule 6 of CCR? - wrong maintenance of records - Clearance of both taxable and exempted finished goods - ratios of inputs were skewed - Suppression of facts - extended period of limitation - HELD THAT:- Rule 6(3) categorically starts with the words – Notwithstanding anything contained in sub-rule (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow any one of the following options, which, inter alia, include option to pay an amount equal to the specified percentage of value of exempted goods or exempted services, along with other option of reversing the proportionate amount under sub-rule (2) or maintain separate accounts for the receipt consumption in the inventory of inputs, as provided in clause (a) of subrule (2) and take credit only on inputs under sub-clause (ii) and (iv) of the said clause (a), and pay an amount as determined under sub-rule (3A) in respect of the input services. Once it is the case that proper records have not been maintained with regard to receipt of inputs and its utilization, sub-rule (3) gives option to the Assessee, and thus, Revenue cannot enforce any of the option(s) under sub-rule (3). Thus, Appellant is entitled to reverse the amount of credit as per option in clause (i) of sub-rule (3) of Rule 6 i.e., pay an amount equal to the specified percentage (5% or 6%) of the value of exempted goods, in the facts of the present case. Appellant shall be entitled to consequential benefits, in accordance with law. As the Appellants have admittedly paid the amount of Rs.1,28,95,173/- during audit/ investigation under protest, they shall be entitled to refund of the same with interest as per Rules - Appeal allowed.
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