TMI Blog2023 (5) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Commissioner of Central Tax (Appeals), Raigad. By the impugned order, Commissioner (Appeals) has upheld Order-in- Original No. Raigad/Div-V/AC/12(06)(RK)/19-20 dated 25.11.2019. Assistant Commissioner, CGST CX, Division-V, Raigad, has in the said order held as follows:- ORDER 1) I confirm the demand of Rs.8,10,122/- (Rupees Eight Lakh Ten thousand One hundred and Twenty two only) under Section 73(2) of the Finance Act, 1994 2) I order appropriation of the amount of Rs.23,528/- (Rupees Twenty three thousand Five hundred and Twenty eight only) paid by them against the demand confirmed 3) I order recovery of interest at the applicable rate in terms of Rule 6(3A)(e) of the Cenvat Credit Rules, 2004 read with Rule 14 of the Cenvat Credit Rules, 2004 4) I impose penalty of Rs.81,012/- (Rupees Eighty one thousand and Twelve only) under Section 76(1) of the Finance Act, 1994 read with Rule 15(1) of the Cenvat Credit Rules, 2004. 2.1 During financial year 2015-16 appellant was providing exempted services viz. handling and transportation of exempted goods, auction/sale of unclaimed goods and ocean freight. They were also providing taxable ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mon input services and not on total Cenvat credit. Since the issue is settled in their favour for the earlier period and no additional ground has been raised, the said decision applies. CBEC vide circular No. 754/70/2003-CX dated 09.10.2003 has clarified that Rule 6 is only for common inputs and input services and the reversal is only for common inputs and input services. Same view has been held in the following decisions:- Pepsico India Holding Pvt. Ltd. [2008 (230) ELT 126 (Tri.-Chennai)] Philips India Ltd. [2006 (200) ELT 106 (Tri.-Mumbai)] IBM India Pvt. Ltd. [Final order No. 20300/2015 dated 11.02.2015] Eicher Tractors [2000 (116) ELT 712 (T)] Sify Technologies Ltd. [2014-TIOL-60-CESTAT-MAD] Chennai Petroleum Corporation Ltd. [2014 (35) STR 169 (Commr. Appl.)] Amendment made in Cenvat Credit Rules, 2016 also requires that reversal should be done only on credit pertaining to common input services and the said amendment is retrospective in nature. In case of Reliance Industries Ltd. [2019-TIOL-1593-CESTAT-AHM] it has been held that amended provisions are having retrospective effect. He would further rely upon the following decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant-assessee. Since the learned Commissioner (Appeals) has held that non-filing of intimation/declaration is a procedural lapse, he should have allowed the appeal in favour of the appellant-assessee, instead of remanding the matter to the adjudicating authority for quantification of the amount to be reversed by the appellant-assessee. I find that the decisions relied upon by the appellant are squarely applicable to the facts of the present case inasmuch as the established principles of law is that the appellate authority is not empowered to raise any fresh issue for the first time, which was not proposed in the show cause notice. Further, I also find that for consideration of the prescribed formula, the learned Commissioner (Appeals) has not specifically issued any notice to the appellantassessee for the defence submissions. Hence, I am of the considered view that consideration of altogether a new ground in the impugned order cannot be sustained for judicial scrutiny and accordingly, the appeal of the appellant-assessee should succeed on such ground. Learned Chartered Accountant contended, on behalf of the appellant, that the initiation of proceedings for ineligibility c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-rule (3A) so as to make it applicable retrospectively. It was all along not the intention of the Government to deny Cenvat credit on the input/ input service even though used in the dutiable goods. Keeping the said view in mind, the substitution in sub Rule (3A) of Rule 6 was made. Therefore, the substituted provision of sub-Rule (3A) shall have retrospective effect being clarificatory. it is contended that the application of an irrelevant formula among the several prescribed in rule 6 of CENVAT Credit Rules, 2004 should not be sustained and that amendment of rule 6 (3A) of CENVAT Credit Rules, 2004 in April 2016 has retrospective effect to determine the outcome of the dispute in their favour. 5. It was also argued that the retrospective application was reiterated by the decision of the Tribunal in Honda Cars India Limited v. Commissioner of Central GST, Customs and Central Excise, Alwar [2021 (2) TMI 948 CESTAT NEW DELHI] holding that 15. It is also seen that with effect from March 01, 2016, the law has been amended clearly specifying that reversal of CENVAT Credit only on common inputs service is required. While clarifying the said issue, at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 6(3A)(b)(ii). According to the Department, the total Cenvat credit should include even those services used exclusively in taxable services, including the common service while according to the appellant it should include only common input services and services used in exempted services and not the services used exclusively in rendering taxable output service. 18. It would be clear from a conjoint reading of sub-rules 6(1), (2) and (3) of Rule 6 that the total Cenvat credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and cannot include Cenvat credit on input service exclusively used for the manufacture of dutiable goods. 19. This position is also clear from the underlying object of the amendment made in Rule 6(3A) of the Rules by Notification dated March 1, 2016, to consider only common input services and not total input service credit, for the purpose of computing the amount of reversal. 20. Such amendment was also clarified by the Tax Research Unit Circular dated February 29, 2016 to apply retrospectively inasmuch as the clarification clearly mentions that the provisions of Rule 6 providing for reversal of cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Authorized Representative countered the assailing of the provision invoked for computing liability. According to him, the excluded portion is to be computed in terms of the parameters as existing when an assessee became liable and not the amended provisions which were, in any case, substitutory and not clarificatory. 7. The issue of the denominator to be adopted for computation of proportionate reversal of CENVAT credit has now been settled as also the retrospective applicability of the amended provision in several decisions and no justification is adduced for not following the said decisions. 8. The impugned order has arrived at an incorrect computation. Accordingly, the computation is set aside and matter remanded back to the original authority for a fresh decision that is in consonance with law as judicially determined supra. 4.3 Though in the earlier case Tribunal has remanded the matter for recomputation, I do not intend to do the same for the reason that in the present case undisputedly the appellant has reversed the Cenvat credit which is as per the table below:- Sr . N o Period Value of exempt se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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