TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal rules in favor of appellant, setting aside demand for 5% on exempted goods</h1> <h3>M/s Hindustan Zinc Limited Versus CCE, Jaipur-II</h3> The Tribunal ruled in favor of the appellant, setting aside the demand for 5% on the value of exempted goods under Rule 6(3) of Cenvat Credit Rules. The ... Reversal of CENVAT credit - inputs relatable to such ore cleared without payment of duty - Held that: - the appellant reversed the credit attributable to the exempted clearances, as such the substantial compliance with reference to Rule 6 has been recorded. However, we note that there is a delay in reversing the proportionate credit by the appellant. The liability of interest for the delayed reversal of credit is confirmed against the appellant. Except for this, we find that there is no legal justification to demand 5% on the value of exempted clearances in the present case - reversal of CENVAT credit not sustainable - appeal is allowed - the appellant liability to interest on delayed reversal of credit is confirmed. Issues:1. Applicability of Rule 6 of Cenvat Credit Rules on the reversal of credit for exempted ore cleared without payment of duty.2. Proper procedure for reversal of proportionate credit on input services related to exempted ore clearances.3. Liability of the appellant to pay 5% on the value of exempted goods under Rule 6(3) of Cenvat Credit Rules.Analysis:1. The appeal challenged the order of the Commissioner of Central Excise regarding the reversal of Cenvat credit on inputs and input services related to exempted ore clearances. The appellants, engaged in non-ferrous metal manufacturing, cleared ore to Zawar mines without duty payment. The department alleged non-compliance with Rule 6, demanding payment of 5% on the value of exempted goods. The original authority confirmed a substantial demand, contested by the appellant.2. The appellant contended that they followed Rule 6 for inputs but delayed reversal of credit on input services until March 2011. The department argued against the appellant's compliance with the prescribed procedure. The Tribunal examined the case, noting the monthly reversal of input credits but delayed reversal of input services credit. Reference was made to a similar case where procedural requirements were considered directory, not mandatory.3. The Tribunal observed that while there was a delay in reversing the proportionate credit for input services, the appellant substantially complied with Rule 6. The impugned order recorded the reversal of credit for exempted clearances, confirming liability for interest due to delayed reversal but rejecting the 5% demand. The Tribunal set aside the order, allowing the appeal and confirming interest liability for the delayed credit reversal. The decision highlighted the lack of legal justification for the 5% demand in this case.In conclusion, the Tribunal ruled in favor of the appellant, setting aside the demand for 5% on the value of exempted goods under Rule 6(3) of Cenvat Credit Rules. The judgment emphasized the importance of procedural compliance while acknowledging substantial adherence to the rule's requirements by the appellant.
TaxTMI 
TaxTMI 
