Tribunal sets aside payment order for exempted products, citing reversal of credit nullifies availed credit.

The Tribunal allowed the appeal in favor of the appellant, setting aside the order requiring payment for exempted products. The decision was based on the principle that reversal of credit nullifies the availed credit, as established in legal precedents. The Tribunal emphasized that treating the reversal of credit as if no credit was ever availed aligns with legal principles.

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Issues:
1. Availment of Cenvat credit on duty paid raw materials for manufacturing biscuits with different RSPs.
2. Interpretation of Rule 6(3)(iii) regarding payment for exempted biscuits post 01/03/2007.
3. Dispute over reversal of Cenvat credit and requirement to pay 10% of the value of exempted goods.
4. Applicability of case law on reversal of credit leading to no credit ever availed.

Analysis:
1. The appellant was manufacturing biscuits with different RSPs and availing Cenvat credit on duty paid raw materials used for both types of biscuits. Post 01/03/2007, biscuits with RSP less than &8377; 50/- per Kg became exempted.

2. The Revenue demanded payment of 10% of the value of exempted biscuits under Rule 6(3)(iii) due to availed Cenvat credit on raw materials. The appellant contended they had reversed a proportionate credit and should not be liable for payment.

3. The Lower Authorities disagreed with the appellant's contention, leading to the present appeal. However, the Tribunal noted that the reversal of Cenvat credit for inputs used in exempted final products should be treated as if no credit was ever availed, as per established legal principles.

4. Citing the Supreme Court decision in Chandrapur Magnet Wires Pvt. Ltd. case, the Tribunal emphasized that reversal of credit equates to no credit availed. Referring to other Tribunal judgments, the Tribunal concluded that since the appellant had reversed the credit, there was no basis to uphold the orders directing payment for exempted products.

5. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, providing consequential relief. The decision was based on the principle that reversal of credit nullifies the availed credit, aligning with established legal precedents and interpretations of relevant provisions.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, the legal interpretation applied by the Tribunal, and the final decision rendered in the case.

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