2021-VIL-64-CESTAT-DEL-CE

CENTRAL EXCISE CESTAT Cases

Central Excise - Trading activity – Reversal of Cenvat Credit – demand of reversal of CENVAT Credit in terms of Rule 6(3A) of the CCR, 2004 - interpretation of the term “CENVAT Credit taken on input services during the financial year” appearing in clause (c) (iii) of sub-Rule 3A of Rule 6 of CCR, 2004 as they were prior to amendment on March 01, 2016 – HELD – the term “Total Cenvat Credit” for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and will not include the Cenvat credit on input/ input service exclusively used for the manufacture of dutiable goods - 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 issue of said amendment, the Government of India vide DOF No. 334/8/2016-TRU dated February 29, 2016 clarified that the amendment made is of clarificatory nature and the principles of reversal of credit remains the same - Rule 6 of CCR, 2004 deals solely with the situation of CENVAT Credit resulting from exempted services and exempted products. The rule itself is clearly designed to deny partial credit of CENVAT credit taken on inputs/input services used in exempted goods and services. The CENVAT credit of other kind has no relevance in this rule. In these circumstances, it is obvious that reference to CENVAT Credit in the said Rule would be reference to CENVAT Credit on common input services which are used for exempted products and services as well as for dutiable products and services - the appellants have been submitting intimation under Rule 6(3A) of CCR, 2004 showing full calculation of the manner in which they have arrived at the reversal of CENVAT Credit - there was no suppression or mis-declaration on the part of the appellant and, therefore, the extended period of limitation could not have been invoked – the impugned order is set aside and appeal is allowed

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