Appeal allowed by CESTAT AHMEDABAD, case remanded for review. Reconsideration of tax percentage.

The appeal was allowed by the Appellate Tribunal CESTAT AHMEDABAD, remanding the case to the Adjudicating Authority for further review. The Tribunal directed a reconsideration of whether the appellant should pay 5% or 6% of the value of exempted trading activities, emphasizing verification of the correctness of the Cenvat credit reversal and the payment related to common input services used in trading activity. The Adjudicating Authority was instructed to issue a fresh order after examining these aspects and granting the appellant a reasonable opportunity for a personal hearing.

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Issues:
Whether the appellant is required to pay the demand raised under Rule 6(3)(ii) of Cenvat Credit Rules for availing Cenvat credit in respect of common input services used in the manufacture of excisable goods and trading activity.

Analysis:
The appellant availed Cenvat credit on common input services, of which a proportionate credit was reversed before the show cause notice was issued. Subsequently, the appellant reversed the entire Cenvat credit availed on common input services. The appellant argued that once the credit was reversed, no demand under Rule 6(3)(ii) of Cenvat Credit Rules was necessary, citing relevant judgments. The Revenue reiterated the findings of the impugned order. The Tribunal considered the issue of whether the appellant should pay 5% or 6% of the value of exempted trading activities. Various judgments were referenced, including the case of CCE & ST, Udaipur vs. Secure Meters Limited, which supported the appellant's position. The Tribunal directed the Adjudicating Authority to reconsider the issue, specifically examining if the appellant paid the Cenvat credit attributed to common input services used in trading activity and any interest due. The correctness of the reversal was to be verified, and a fresh order was to be passed after considering these aspects. The appellant was to be given a reasonable opportunity for a personal hearing before the new order was issued. The appeal was allowed by remanding it to the Adjudicating Authority for further review.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the arguments presented by both parties, the application of relevant legal provisions, and the Tribunal's decision to remand the case for further examination by the Adjudicating Authority.

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