Retrospective credit reversal amendment required fresh adjudication on common inputs used for exempted and dutiable goods.

Retrospective amendments to the credit reversal scheme required reconsideration of whether reversal of credit attributable to common inputs used in exempted goods was sufficient. The dispute was therefore not finally decided on the existing record, because compliance with the amended credit provisions had to be examined in light of the appellant's claim of reversal. The matter was remanded to the Commissioner for fresh adjudication after giving the appellant an opportunity of hearing.

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Issues: Whether the demand and penalty required reconsideration in view of the retrospective amendment relating to reversal of credit on common inputs used for exempted and dutiable goods.

Analysis: The dispute turned on the effect of the retrospective amendments to the credit reversal scheme, under which reversal of credit attributable to inputs used in exempted goods was treated as sufficient. As the earlier order in a similar matter had already remanded the issue for examination of compliance with the amended credit provisions, the same approach was applied here. The matter therefore required a fresh decision by the adjudicating authority after considering the retrospective legal position and the appellant's claim of credit reversal.

Conclusion: The matter was remanded to the Commissioner for fresh adjudication, with an opportunity of hearing to the appellant.

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