Reversal of common input service credit required fresh verification before deciding sustainability of the Rule 6(3) demand.

Demand under Rule 6(3) of the Cenvat Credit Rules depended on whether the assessee had fully reversed common input service credit. The adjudicating authority had found only partial reversal, while the appellate record suggested the assessee claimed full reversal, but that factual position had not been properly verified. As the extent of reversal required fresh examination, the matter could not be decided on the existing record. The impugned order was set aside and the matter was remanded to the original authority for reconsideration after granting the assessee a reasonable opportunity to produce additional documents.

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Issues: Whether the demand under Rule 6(3) of the Cenvat Credit Rules was sustainable in view of the claim that the full amount of common input service credit had been reversed.

Analysis: The adjudicating authority had recorded that the common input service credit taken by the assessee had not been fully reversed and that only a limited amount had been reversed. The appellate record also indicated a contention that the entire amount had in fact been reversed, but that aspect had not been properly examined at the original stage. As the factual position regarding reversal of credit required proper verification, the matter could not be finally decided on the existing record.

Conclusion: The impugned order was set aside and the matter was remanded to the original authority for fresh decision after granting the assessee a reasonable opportunity to produce additional documents.

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