Pre-deposit waived when the appellant has reversed Cenvat Credit under Rule 6(3A) but failed to intimate the same on time.

PJ/ Case Laws/2012-13/1280

Case:-M/s EMAMI LTD SHRI ANAND MUNDRA versus COMMISSIONER OF ENTRAL EXCISE, VAPI

Citation:-2012-TIOL-1368-CESTAT-AHM

Brief Facts:-The Assessee is engaged in manufacture of dutiable goods & exempted goods from common inputs and he had availed cenvat credit of the service tax paid on the common inputs which are used in the exempted as well as dutiable finished products manufactured and cleared from their factory and has not followed the procedure as per Rule 6(3) of the Cenvat Credit Rules, by not maintaining the separate books of account.

Appellant’s Contention:-The Appellant submitted that the appellant had already reversed cenvat credit along with interest calculated as per the provisions of Rule 6(3A) of Cenvat Credit Rules, 2004 and also submit Chartered Accountant's certificate before the lower authorities which is annexed at Page 48 and 49 of the appeal memorandum. It is his submission that the adjudicating authority has not considered the same in its proper perspective and he relied upon the decision of this Tribunal in the case of Global Pharmatech Pvt. Limited vs. CCE Chennai - 2011 (273) ELT 413 (Tri. Chennai) = (2011-TIOL-524-CESTAT-MAD) for the proposition that, once an amount attributable to the inputs which go in the manufacture of exempted goods are reversed, post amendment the Rule 6(3) of Cenvat Credit Rules, 2004, it is substantial compliance of the law.

Respondent’s Contention:-The Respondent Submit that appellant herein has not given option of reversal of cenvat credit to the lower authorities before reversing the same. It is his submission that the calculation which are indicated also seems to be incorrect as they contain the services like advertising agency services, which are attributable to the goods manufactured and cleared.

Reasoning of Judgement:-We considered the submissions made by both sides, we find that there is no dispute as to the fact that appellant is availing cenvat credit of the service tax paid on the input services distributed by their Head Office as Input Service Distributor. It is also undisputed that the appellant is utilizing the ISD service tax credit for discharge of Central Excise duty on the goods manufactured and cleared by them. It is seen from the records that the appellant has claimed that they have reversed the amount which is attributable to the input services which go into manufacturing of exempted products. We also find from the certificate issued by the Chartered Accountant and the appellant could have intimated the departmental authority regarding the option of reversal of input services which are attributable to the exempted goods but having reversed the same, we find that appellant has made out a prima facie case for the waiver of pre-deposit of amounts which are confirmed against the main appellant on the ground that they are liable to pay 5% of the value of the exempted goods cleared from their factory premises. In view of the above, applications for the waiver of pre-deposit of amounts involved are allowed and recovery thereof stayed till the disposal of appeals.

Decision:-Pre-deposit waived and appeal allowed.

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PJ/ Case Laws/2012-13/1280

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