Retrospective credit reversal relief applies to pending disputes when substantive compliance is already reflected in the record

A retrospective statutory mechanism under Section 69 of the Finance Act, 2010 read with Rule 57CCC was treated as covering pending disputes on reversal of credit relating to inputs used in exempted and dutiable goods, where proportionate credit had already been reversed in the manner contemplated by the amended provision. The rejection of the claim for want of complete verification from old records was found unsustainable because the Chartered Accountant's certificate and the reversal figures were already reflected in the revenue record. Limited verification of arithmetic accuracy and interest remained necessary, with refund consequences to follow that exercise.

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Issues: (i) Whether the appellant was entitled to the benefit of Section 69 of the Finance Act, 2010 read with Rule 57CCC of the Central Excise Rules, 1944 in respect of the dispute relating to reversal of credit on inputs used in exempted and dutiable goods. (ii) Whether the Commissioner was justified in rejecting the application on the ground that the Chartered Accountant's certificate and the amount reversed could not be verified from the available records.

Issue (i): Whether the appellant was entitled to the benefit of Section 69 of the Finance Act, 2010 read with Rule 57CCC of the Central Excise Rules, 1944 in respect of the dispute relating to reversal of credit on inputs used in exempted and dutiable goods.

Analysis: The retrospective amendment introduced by Section 69 of the Finance Act, 2010 was intended to cover disputes pending for the relevant period, and the appellant's dispute fell within that window. The record showed that the appellant had already reversed the proportionate credit attributable to exempted goods in the manner contemplated by the amended provision.

Conclusion: The appellant was entitled to invoke the benefit of Section 69 of the Finance Act, 2010 read with Rule 57CCC of the Central Excise Rules, 1944.

Issue (ii): Whether the Commissioner was justified in rejecting the application on the ground that the Chartered Accountant's certificate and the amount reversed could not be verified from the available records.

Analysis: The certificate rested on figures already reflected in the show cause notice and accepted in the adjudication record, and the only remaining task was verification of the arithmetical correctness of the amount reversed and any interest payable. On that basis, the rejection for want of complete verification of old records was unsustainable.

Conclusion: The rejection on verification grounds was not justified.

Final Conclusion: The appeal succeeded to the extent that the appellant's entitlement to the statutory benefit was recognised, while the matter was sent back only for limited verification of arithmetic accuracy and interest, with consequential refund relief left to follow the outcome of that exercise.

Ratio Decidendi: Where a retrospective statutory mechanism is available to settle a pending credit-reversal dispute and the substantive compliance is established from records already relied upon by the revenue, the authority may not reject the claim merely for inability to re-verify old documents if only arithmetical scrutiny remains.

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