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of <h1>Appellant prevails in tax dispute over exempted goods, highlighting Cenvat credit rules</h1> <h3>UNIMED TECHNOLOGIES LTD. Versus COMMR. OF CENTRAL EXCISE, VAPI</h3> UNIMED TECHNOLOGIES LTD. Versus COMMR. OF CENTRAL EXCISE, VAPI - 2012 (278) E.L.T. 461 (Tri. - Ahmd.) Issues:1. Cenvat credit availed on common inputs for dutiable and exempted goods.2. Requirement to pay an amount equal to a percentage of the value of exempted goods.3. Dispute regarding reversal of Cenvat credit attributable to inputs used in manufacturing exempted goods.4. Retrospective amendment of Cenvat Credit Rules by the Finance Act, 2010.5. Correctness and sustainability of the impugned order confirming demands.Analysis:The appellant, engaged in manufacturing excisable and exempted goods, availed Cenvat credit on common inputs used for both types of goods. Lower authorities held that due to the lack of separate accounts for dutiable and exempted goods, the appellant must pay a percentage of the value of exempted goods cleared during a specific period. The appellant had reversed the proportionate Cenvat credit attributable to inputs used in manufacturing exempted goods. The Tribunal noted that the appellant had followed this procedure even before a retrospective amendment of the Cenvat Credit Rules by the Finance Act, 2010, which required such reversal. The Tribunal concluded that the impugned order demanding payment based on the value of exempted goods was incorrect and unsustainable.The Tribunal found that the appellant's actions were in line with the retrospective amendment, even before its enactment. Therefore, the demand for payment based on the value of exempted goods was deemed incorrect. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The judgment highlights the importance of compliance with Cenvat credit rules and the impact of retrospective amendments on such cases. The decision provides clarity on the treatment of Cenvat credit for inputs used in manufacturing both dutiable and exempted goods, emphasizing the need for adherence to statutory provisions and procedures.
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