Appeal allowed, case remanded for verification of amount with interest. Adjudicating authority to rectify discrepancies. Penalties deleted.

The appeal was allowed, and the case was remanded for verification of the amount to be reversed with interest. The adjudicating authority was directed to allow the appellant to rectify any discrepancies. Penalties were deleted as the issue was interpretational without suppression of facts.

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Issues Involved:
1. Reversal of Cenvat credit under Rule 6(3)(ii) of CCR, 2004.
2. Applicability of extended period of limitation.
3. Imposition of interest and penalties.

Detailed Analysis:

Issue 1: Reversal of Cenvat credit under Rule 6(3)(ii) of CCR, 2004
The appellant, M/s APL Apollo Tubes Ltd., is a manufacturer of Steel Tubes & Pipes and avails Cenvat credit for inputs and input services. An audit revealed that the appellant was also engaged in trading activities, which, following an amendment effective from 01/04/2011, was declared as an exempt service. The Revenue contended that the appellant needed to reverse/pay an amount calculated at 5% on the value of the traded goods under Rule 6(3)(i) of CCR, 2004. However, the appellant opted to pay an amount under sub-rule (3A) of Rule 6, which they communicated to the jurisdictional superintendent. The Tribunal referenced the Mercedes Benz India Pvt. Ltd. case, which clarified that the appellant has the liberty to choose any of the options provided under Rule 6(3) and that the Revenue cannot insist on a particular option. The appellant had complied with the conditions of Rule 6(3)(ii) by reversing the credit and paying the amount along with interest, thereby fulfilling their obligations under the rule.

Issue 2: Applicability of extended period of limitation
The appellant argued that the issue was interpretational and that there was no suppression of facts or malafide intention. The Tribunal agreed, noting that the activities were duly recorded in the books of accounts and that the information was obtained by the audit from these records. Consequently, the Tribunal held that the extended period of limitation was not applicable, making the demand for the period from April 2011 to September 2011 time-barred.

Issue 3: Imposition of interest and penalties
The Tribunal considered the appellant's compliance with Rule 6(3A) and noted that the appellant had sufficient unutilized Cenvat credit balance, which indicated that they had not utilized the credit in question. The Tribunal referenced the Simbhaoli Sugar Mills Ltd. case, which held that interest is compensatory and is not payable if the credit was reversed before utilization. The Tribunal also held that the penalties were not justified as the issue was interpretational and there was no suppression of facts. Consequently, the penalties imposed under various sections were deleted.

Conclusion:
The appeal was allowed by way of remand for the limited purpose of verifying the amount to be reversed along with interest. The adjudicating authority was directed to verify the amounts and provide the appellant an opportunity to rectify any discrepancies. The penalties were deleted due to the interpretational nature of the issue and the absence of suppression of facts.

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