Tribunal grants appeal, overturns 10% demand on exempted goods under CENVAT Credit Rules 2004. Compliance key.

The Tribunal allowed the appeal, setting aside the demand for 10% amount on exempted goods by applying the retrospective amendment to Rule 6 of CENVAT Credit Rules 2004. The appellant's argument was supported by a previous decision in their favor. Additionally, the waiver of penalty under Rule 15 was granted as the appellant had paid interest on the differential amount reversed. The Tribunal emphasized compliance with the rules to avoid penalties under CENVAT Credit Rules 2004.

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Issues:
Demand of 10% amount on exempted goods, applicability of retrospective amendment to Rule 6 of CENVAT Credit Rules 2004, waiver of penalty under Rule 15 of CENVAT Credit Rules 2004.

Analysis:
1. The primary issue in this case pertains to the demand of an amount equivalent to 10% of the value of exempted goods cleared during a specific period due to the appellant availing CENVAT credit on common inputs used for both exempted and dutiable goods without maintaining separate accounts. The appellant argued that the retrospective amendment to Rule 6 of CENVAT Credit Rules 2004, as per Section 73 of the Finance Act 2010, allows for the reversal of credit attributable to inputs used in the manufacture of exempted goods, eliminating the need to reverse 10% of the value of exempted goods. This argument was supported by a previous decision in the appellant's favor (Final Order A/30032/2009), and the Tribunal found no reason to deviate from this stance.

2. The second issue raised was regarding the waiver of penalty under Rule 15 of CENVAT Credit Rules 2004. In a previous decision, the appellant's request for waiver was denied due to non-payment of interest on the differential amount reversed by them. However, in the present case, the appellant provided evidence of payment towards interest, seeking the waiver of the penalty imposed. The Tribunal, after considering the submissions, found merit in the appellant's case and granted the waiver of the penalty.

3. Consequently, the Tribunal set aside the impugned order and allowed the appeal, providing for consequential relief if any. The decision was made after a thorough examination of the arguments presented, the relevant legal provisions, and the previous rulings in favor of the appellant. The judgment highlighted the importance of adherence to the amended rules and the necessity of fulfilling procedural requirements to avoid penalties under the CENVAT Credit Rules 2004.

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