Proportionate CENVAT credit reversal for exempted goods accepted, with remand for verification of attributable credit.

Amended Rule 6 of the CENVAT Credit Rules, 2002 permitted proportionate reversal of credit attributable to exempted products with retrospective effect under the Finance Act, 2010. The Tribunal accepted that the appellant could claim this benefit where proportionate credit had allegedly been reversed periodically, even though separate records were not maintained. Because the actual quantum of credit attributable to exempted goods still required factual verification, the matter was remanded to the adjudicating authority for ascertainment of the credit position and fresh decision in accordance with law.

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Issues: Whether the appellant was entitled to the benefit of the amended Rule 6 of the CENVAT Credit Rules, 2002 permitting proportionate reversal of credit attributable to exempted products, and whether the matter required verification and remand.

Analysis: The appellant claimed that the proportionate CENVAT credit relatable to exempted goods had already been reversed periodically, though separate records were not maintained. The Tribunal noted that the amendment to Rule 6, introduced by the Finance Act, 2010 with retrospective effect, permitted such proportionate reversal and had already been taken into account in the cited High Court decision. Since the actual quantum of credit attributable to exempted products still required verification, the Tribunal found it appropriate to send the matter back to the adjudicating authority for factual ascertainment and reconsideration in accordance with law.

Conclusion: The appellant was held entitled to consideration of the amended Rule 6 benefit, and the matter was remanded to the adjudicating authority for verification of the credit attributable to exempted goods and for passing a fresh order.

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