Appeal granted due to eligibility for re-credit under Rule 6(6) of Cenvat Credit Rules (6)

The Tribunal allowed the appeal, finding that the penalty and demand imposed by the Assistant Commissioner were unsustainable due to the appellant's eligibility for re-credit under Rule 6(6) of the Cenvat Credit Rules for goods supplied against international competitive bidding with full duty exemption. The Tribunal held that the provisions of certain sub-rules did not apply in this scenario, ultimately granting relief to the appellant.

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Issues:
1. Incorrect reversal of cenvat credit amount under Rule 6(3)(b) by the appellant.
2. Imposition of penalty and demand confirmation by the Assistant Commissioner.
3. Appeal against the order of the Commissioner (Appeals) regarding cenvat credit demand and penalty.

Analysis:
1. The appellant, a manufacturer of 'Dehumidifying Type Compressed Air Dryer,' supplied goods to NTPC under international competitive bidding with full duty exemption under Notification No. 6/2006-CE. Due to not maintaining separate accounts for dutiable and exempted final products, they mistakenly paid an amount under Rule 6(3)(b) of Cenvat Credit Rules. Upon realizing their error, they requested re-credit from the Assistant Commissioner, which was allowed on 20.04.2009 after the appellant took re-credit on 31.03.2009. The Commissioner (Appeals) upheld the demand and penalty imposed by the Assistant Commissioner, leading to the current appeal.

2. The appellant argued that as per Rule 6(6) of Cenvat Credit Rules, the provisions of sub-rules (1), (2), (3), and (4) are not applicable for goods supplied against international competitive bidding with full duty exemption. They contended that the penalty imposed for taking suo moto credit and the allegation of excess utilization of cenvat credit were unjustified. The Revenue opposed the stay application, stating that the appellant was not allowed to take suo moto credit even if eligible for re-credit.

3. The Tribunal noted that under Rule 6(6), the provisions of sub-rules (1), (2), and (3) were not applicable for goods supplied against international competitive bidding with full exemption. The appellant's request for re-credit was eventually allowed by the Assistant Commissioner on 20.04.2009, rendering the penalty and demand unsustainable. The Tribunal allowed the appeal, providing consequential relief if any, based on the above analysis.

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