Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  GST registration cancellation without reasons amounts to ‘Economic Death’ of business: Supreme Court. *  No GST refund if appeal before GSTAT is filed late: Gujarat High Court. *  Mere upload of GST notice on portal not valid service, appeal limitation won’t start: Punjab & Haryana High Court. *  Taxpayer can’t be penalised for missing notices hidden under ‘Additional Notices/Orders’: Calcutta High Court allows fresh adjudication. *  State tax officer can’t issue GST SCN beyond CBIC-assigned jurisdiction: Bombay High Court stays recovery proceedings. *  Earlier 7.5% Pre-Deposit must count towards mandatory 10% for Appeal: Uttarakhand high court quashes CESTAT Order. *  Third Parties can’t challenge GST Advance Rulings merely due to financial impact: Karnataka HC *  GST SCN generated using AI tool quashed: Punjab & Haryana High Court *  Bank Attachment Quashed as Madras HC Quashes GST Order Issued Against Deceased Person *  ITC Blocking Order for Failure to Record ‘Reason to Believe’ U/R 86A Quashed: Allahabad High Court *  Govt Extends GSTAT Appeal Filing Deadline From 30 June to July 31, 2026 *  GST Demand on RWA Stayed: Allahabad High Court Questions Taxability of Electricity Distribution to Flat Owners *  CBIC Clarifies Jurisdiction After GST Registration Transfer: Earlier Proceedings Remain Valid, New Officer to Continue Action *  GST authorities’ certification not mandatory for reimbursement, but tax payment must be proven: Karnataka HC *  Contractor can’t seek gst reimbursement through writ when contract has arbitration clause: Karnataka HC *  Unsigned Order Is No Order in Law: AP HC Quashes GST Assessment Order for Want of Officer’s Signature *  Customs Can’t Levy Rs. 1.36 Crore Cost Recovery Charges Without Proof of Full-Day Officer Deployment: CESTAT  *  12% IGST Payable On Imported Dialysis Machine Parts: CESTAT *  Bombay High Court Admits Challenge to GST Limitation Extension Notifications; Grants Protection Against Coercive Recovery *  Criminal Case Can’t Run Parallel to GST Proceedings on Same Facts: Allahabad High Court *  Allahabad High Court Stays GST Detention Order; Directs Release of Vehicle and Goods on Deposit of Rs. 1.44 Lakh *  Service Tax Can’t Be Levied on Loss-Making Contracts: Gujarat High Court *  GSTN Mandates Ship-to GSTIN in e-Invoice and e-Way Bill APIs; Introduces Voluntary e-Way Bill Closure Facility from August 1, 2026 *  GST Appeal Can’t Be Rejected as Time-Barred When Taxpayer Was Pursuing Rectification Remedy: Telangana High Court *  Absence of E-Way Bill and Transport Documents Justifies Customs Seizure U/s 110: Gauhati HC *  Madras High Court Upholds GST Late Fee and Penalty for Non-Filing of Annual Return, Dismisses Challenge  *  GST Records, Purchase Documents Sufficient to Discharge Burden Under Customs Act: CESTAT Orders Release of 3.65 Kg Gold  *  No Sugar Cess Payable on Sugar Exported Out of India: CESTAT *  Road Construction Services Exempt and SCN Time-Barred: CESTAT Quashes Service Tax Demand Based Solely on Form 26AS  *  ITC Freeze Upheld After GST Dept Find Suppliers Were Allegedly Fake Bill-Trading Entities: Madras HC 
Subject News *  Input service benefits can’t be denied: CESTAT allows export refund despite MMTC acting as Canalising agency. *  No service tax demand without proof of service of SCN: CESTAT. *  Service tax demand quashed as dept. fails to prove service of SCN: CESTAT *  GST : Mere allegation of inadequate consideration of reply not enough to invoke writ jurisdiction: Delhi High Court *  Onerous conditions imposed for provisional release of seized imported goods shouldn’t amount to virtual denial of relief: CESTAT. *  GST SCN without alleging fraud cannot invoke sec. 74: Karnataka High Court quashes adjudication order. *  Extended Limitation Can’t Be Invoked Merely on Form 26AS Data: CESTAT *  Revenue-Sharing with Restaurants Not Taxable as Business Support Service: CESTAT *  R. 6(3) Option Can’t Be Forced on Taxpayer; CESTAT Quashes Rs. 12.36 Crore CENVAT Credit Demand *  Excise Duty | Power Consumption Alone Can’t Prove Clandestine Manufacture: Karnataka High Court *  Madras High Court Examines DGGI’s Authority to Issue GST Penalty Orders Under Section 122, Adds DGGI as Party *  Proceedings under omitted r. 96(10) can’t survive without saving clause: andhra pradesh high court quashes gst refund recovery *  Excise duty power consumption alone can’t prove clandestine manufacture: karnataka high court *  Madras high court rules GST show cause notices must disclose grounds for invoking extended limitation *  Court Can’t Direct Extension GST Return Deadlines or Waive Interest and Penalties: Karnataka High Court *  GST Notifications Can’t Go Beyond GST Council Recommendations: Madras High Court Quashes SCN on Branded Pulses *  Appeal Can’t Be Dismissed for Delay When Dept’s Own Order Mis-states Limitation Period: CESTAT *  No Evidence of KYC or Due Diligence Breach By Customs Broker: CESTAT Quashes Licence Revocation in Export Overvaluation Case *  Glucometers Are Chemical Analysis Instruments Classifiable Under Tariff Heading 9027: CESTAT *  Validity of Post-GST Service Tax Proceedings Upheld: Gujarat High Court Dismisses Challenge to S. 73 SCN *  Rectified GST Refund Applications Can’t Be Rejected as Time-Barred If Original Refund Claim Was Filed Within Limitation: Gujarat HC *  Service Tax Refund Can’t Be Denied as Time-Barred When Levy Itself Is Unconstitutional: Gujarat High Court *  Same Officer Can’t Act As Auditor & Adjudicator: Karnataka High Court *  Karnataka High Court Condones 324-Day Delay, Revives Customs Appeal in Jewellery Pilferage Case  *  Madras High Court Quashes GST Assessment Order Passed Ex Parte Despite Prior ITC Reversal; Lifts Bank Attachment *  Tobacco Process Doesn’t Amount to Manufacturing: Madras High Court Quashes Rs. 1.32 Crore Compensation Cess Demand  *  Recovery Notice Unsustainable After Voluntary Reversal of Unutilised Credit: CESTAT  *  GST | ‘System Generated’ SCN Without Officer Details Invalid: Allahabad HC  *  Electronic Records Without Statutory Certification Requirements Can’t Justify Undervaluation Allegations: CESTAT *  Madras High Court Stays GST Order, Finds Prima Facie Merit in Plea Against S. 74 Proceedings Based on S. 73 Intimation  

Comments

Print   |    |  Comment

PJ/Case Laws/2010-11/1068

Reversal of Cenvat credit under Rule 6 of CCR, 2004

Case: Commissioner of Central Excise v/s Maan Pharmaceuticals Limited
 
Citation: 2011 (263) E.L.T. 661 (Guj.)
 
Issue: - When cenvat credit is reversed then there is no need of reversal of Cenvat credit.
           
Brief Facts:- Respondent assessee is engaged in the manufacture and clearance of P & P medicines falling under Chapter 30 of Central Excise Tariff Act, 1985. Respondent were manufacturing both dutiable and exempted products. Respondent were availing modvat credit of duty paid on the raw materials used in the manufacturing of their products.
 
An audit objection was raised regarding availment of credit on raw material used in the manufacture of exempted product. Respondent contended that it was not possible for them to maintain separate records for common inputs. However, they agreed to work on the modvat credit in respect of the inputs used in manufacture of exempted final product and reverse the credit so availed by it. Accordingly, respondent reversed the modvat alongwith interest.
 
Revenue issued show cause notices demanding duty equal to 8% of the total price of the exempted final goods with interest and penalty. The Adjudicating Authority held that though the issue was decided in favour of respondent in many cases as well as by the decision of the Supreme Court in M/s Chanrapur Magnet Wires Ltd [1996 (81) ELT 3 (SC)], in light of the Circular stating that assessee has no option but to reverse 8% of the price of exempted products, and which is binding on them, the demand with interest was confirmed and equal penalty was imposed.
 
The Tribunal set aside the impugned order and allowed the appeal of the respondent. Aggrieved by the impugned order, Revenue is in appeal before the High Court.  
 
Appellant’s Contention:- Revenue contended that in the light of the provisions of Rule 6 of the Cenvat Credit Rules, 2002 it was incumbent upon the assessee to either maintain separate accounts or pay duty at the rate of 8% in case it did not opt to maintain separate accounts.  
 
Respondent’s Contention:Respondent-assessee contended that the Tribunal has placed reliance upon the decision in the case of M/s Chandrapur Magnet Wires Ltd., as well as a decision of High Court in case of M/s Maize Products v. Ahmedabad [2007 (79) RLT 662]. It was submitted that the Revenue’s appeal in High Court was dismissed as reported at 2009 (234) ELT 431 (Guj). It was submitted that the decision of the Tribunal being in consonance with the principles enunciated by this Court as well as the Supreme Court in the above referred decisions, no case is made out to warrant any interference.
 
Reasoning of Judgment:- It was noted that the Tribunal has merely followed the decision of the Supreme Court in the case of M/s Chandrapur Magnet Wires Ltd as well as the decision of the High Court in the case of M/s Maize Products.
 
It was noted that this Court had held that “…Under the Rule, Explanation-1 provides that the amount mentioned in any of the conditions shall be paid by the manufacturer by debiting the Cenvat credit or otherwise.” It was further held that “……the respondent-assessee having accepted before the Tribunal to reverse the Cenvat credit as recorded by the Tribunal…and accordingly the Tribunal has issued directions accordingly.”
 
It was held that examining the impugned order of the Tribunal it cannot be said that Tribunal has committed any legal infirmity which require interference. No question of law arises.
 
Decision:- Appeal accordingly dismissed.
 
Comments:- This  is very good decision as Mumbai High Court has maintained in case ofNicholas Primal (India) Ltd [2009-TIOL-649-HC-MUM-CX] that the assessee does not have any option except to reverse the cenvat credit @ 8%. Even the government has given retrospective amendment after this judgement. But this decision of Gujarat High Court has given relief to assessee.  

***********

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com