Tribunal Upholds Ruling on Cenvat Credit for Exempted Goods

The Tribunal upheld the impugned order-in-appeal, rejecting the Revenue's appeal against the reversal of Cenvat credit on inputs used for manufacturing exempted and dutiable goods. The Commissioner (Appeals) ruled in favor of the respondent, citing precedents and finding that the demand, interest, and penalty were not sustainable. As the appellant had already reversed the Cenvat credit on inputs for exempted products, the Tribunal found in favor of the respondent based on a previous decision in another case. The Revenue's appeal was dismissed for lacking any infirmity.

---

---

Issues involved: Appeal against Order-in-Appeal regarding reversal of Cenvat credit on inputs used for manufacturing exempted and dutiable goods.

Summary:
1. The Revenue appealed against Order-in-Appeal No. Pll/BKS/300/06, contending that the Commissioner (Appeals) erred in allowing the respondent's appeal regarding the reversal of Cenvat credit on inputs used for manufacturing goods.

2. The Revenue argued that as per Rule 6(3), the appellant must pay 10% of the amount if no separate accounts are maintained for inputs used in exempted goods. The respondent cited precedents to support their case.

3. After considering submissions, it was found that the respondent used inputs for both exempted and dutiable goods without separate accounts. The Commissioner (Appeals) relied on previous judgments and ruled in favor of the respondent, stating that the demand, interest, and penalty were not sustainable.

4. Since the appellant had reversed the Cenvat credit on inputs for exempted products, the Tribunal found in favor of the respondent based on a previous decision in the case of Rashtriya Ispat Nigam Limited.

5. The impugned order was upheld, and the Revenue's appeal was rejected as it did not have any infirmity.

---