CENVAT credit reversal dispute: remand upheld where only attributable credit verification was in issue and procedural objection was not raised.

The dispute concerned reversal of CENVAT credit on common inputs used for both dutiable and exempted goods, and the Tribunal remanded the matter because the only issue argued was whether the assessee had properly reversed the credit attributable to exempted goods. The High Court noted that the retrospective amendment to Rule 6 of the CENVAT Credit Rules, 2004 applied only to disputes relating to 10 September 2004 to 31 March 2008, and that the Revenue had not raised the specific objection based on non-compliance with the Rule 6(3A) option procedure before the Tribunal. The remand for verification was upheld and the Revenue's appeal was dismissed.

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Issues: Whether the Tribunal was justified in remanding the matter for fresh adjudication in view of the retrospective amendment to Rule 6 of the CENVAT Credit Rules, 2004 and the assessee's claim of proportionate reversal of credit attributable to exempted goods.

Analysis: The dispute related to reversal of CENVAT credit in respect of common inputs used for both dutiable and exempted goods during the period April 2008 to December 2008. The retrospective amendment inserted by Section 73 of the Finance Act, 2010 was held to apply only to disputes relating to the period from 10 September 2004 to 31 March 2008, and the court noted that the Revenue had not raised before the Tribunal the specific objection based on non-compliance with the option procedure under Rule 6(3A). The only issue argued before the Tribunal was whether credit attributable to exempted goods had in fact been reversed properly, which required verification of the assessee's calculation.

Conclusion: The Tribunal's order remanding the matter for fresh consideration was upheld and the Revenue's appeal was dismissed.

Ratio Decidendi: Where the controversy before the appellate forum is confined to proper reversal of attributable credit, and the specific procedural objection is not raised before that forum, the matter may be remitted for verification rather than sustaining the demand outright.

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