Appellant wins credit reversal case under Rule 6 with legal precedents & retrospective amendment

The Tribunal ruled in favor of the appellant, holding that the reversal of credit on common inputs for dutiable and exempted goods was compliant with Rule 6, based on legal precedents and the retrospective amendment to the Cenvat Credit Rules. The Tribunal set aside the impugned orders, allowing both appeals of the appellant with consequential relief.

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Issues:
Appeals against impugned orders passed by Commissioner - Identical issue in both appeals - Disposal by common order.

Analysis:

Issue 1: Reversal of credit on common inputs for dutiable and exempted goods

The appellant, engaged in manufacturing bulk drugs and medicines, filed appeals against orders demanding duty and penalty. The dispute revolved around the reversal of credit on common inputs used for both dutiable and exempted bulk drugs. The Commissioner confirmed the duty demand but dropped the penalty. The appellant argued that they had proportionately reversed the credit on common inputs, citing legal precedents and the retrospective amendment to Rule 6 of the Cenvat Credit Rules. The appellant relied on various decisions supporting their contention that the reversal of credit on common inputs was sufficient compliance with Rule 6. The Tribunal agreed with the appellant, citing settled law that the demand was unsustainable as the proportionate credit was already reversed by the appellant. The Tribunal set aside the impugned orders, allowing both appeals with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the reversal of credit on common inputs for dutiable and exempted goods was compliant with Rule 6, based on legal precedents and the retrospective amendment to the Cenvat Credit Rules.

Final Decision:
The Tribunal set aside the impugned orders, allowing both appeals of the appellant with consequential relief.

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