Exclusion of exported service value under Cenvat Rule 6(7) required fresh fact finding before final computation.

Exported business auxiliary service value could not be finally included in the Rule 6 Cenvat credit computation without first determining the applicability of Rule 6(7), which excludes exported services from the calculation. Because the factual basis for applying the formula had not been properly examined, the original authority was directed to re-evaluate the computation. The impugned orders were set aside and the matter was remanded for fresh fact finding on the exclusion of exported service value.

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Issues: Whether the value of exported business auxiliary service was required to be excluded while computing the amount under Rule 6 of the Cenvat Credit Rules, 2004, and whether the matter should be remanded for fresh fact finding.

Analysis: The appellant had exported business auxiliary service, and sub-rule (7) of Rule 6 of the Cenvat Credit Rules, 2004, which came into force with effect from 01.07.2012, provides for non-inclusion of the value of exported service. The computation adopted by the lower authorities included the export service value, but the applicability of sub-rule (7) to the facts was not specifically examined. Since the proper factual basis for applying the formula under Rule 6 was not determined, fresh examination by the original authority was necessary.

Conclusion: The inclusion of the exported service value in the computation was not finally sustained, and the matter was remanded to the original authority for proper fact finding on the applicability of Rule 6(7).

Final Conclusion: The impugned orders were set aside and the appeals were allowed by way of remand for reconsideration of the Cenvat credit computation.

Ratio Decidendi: Where the applicability of the exclusion for exported services under Rule 6(7) requires factual determination, the demand computation cannot be finally sustained without proper fact finding, and remand is warranted.

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