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of <h1>Tribunal grants appeal, rejects Revenue's demand for Cenvat credit reversal on common input services.</h1> The Tribunal allowed the appellant's appeal, holding that the demand by Revenue for reversal of Cenvat credit for common input services used in trading ... CENVAT credit - common input services were utilized for trading and manufacturing - reversal of proportionate credit in relation to input services utilized for trading - Sub-rule (3) of Rule 6 of Cenvat Credit Rules - period from April, 2015 to September, 2015 - HELD THAT:- This Tribunal in M/S AGRIMAS CHEMICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA-II [2019 (8) TMI 1253 - CESTAT ALLAHABAD] held that demand against the appellant was not sustainable the period from April, 2011 to March, 2015. Appeal allowed - decided in favor of appellant. Issues:1. Reversal of Cenvat credit for common input services utilized for trading and manufacturing.2. Statement of demand issued by Revenue for the period from April 2015 to September 2015.3. Previous show cause notice for the period from April 2011 to March 2015.4. Applicability of Rule 6(3) of Cenvat Credit Rules.5. Precedent decision of the Tribunal regarding reversal of Cenvat credit.Analysis:1. The appellant was engaged in the manufacture of Pesticides and availed the facility of Cenvat credit for common input services used in both trading and manufacturing activities. The appellant reversed Cenvat credit of Rs. 1,62,718/- pertaining to the input services utilized for trading during the period from April 2015 to September 2015.2. The Revenue issued a statement of demand to the appellant for the same period, subsequent to an earlier show cause notice covering the period from April 2011 to March 2015. The Tribunal, in a Final Order dated 19/06/2019, had previously held that the demand against the appellant for the period from April 2011 to March 2015 was not sustainable.3. The Tribunal noted that the Adjudicating Authority did not dispute the reversal of Cenvat credit by the appellant's head office for common input services used in trading. The Tribunal emphasized that the reversal made by the head office, along with the payment of interest, implied that no credit was availed for the common services used in trading. Therefore, the further demand based on Rule 6(3) was deemed unsustainable.4. Referring to the precedent decision of the Tribunal, the Hon'ble Member (Technical) set aside the impugned order and allowed the appeal, following the reasoning that demanding a particular percentage of the value of traded goods in terms of Rule 6(3) was not in accordance with the Cenvat Credit Rules or settled legal principles.5. The judgment reaffirmed the principle that in cases of reversal of proportionate credit attributable to exempted goods/services, further demands under Rule 6(3) were unsustainable. The Tribunal's decision aligned with various judicial and quasi-judicial authorities, providing consequential relief to the appellant based on the established legal precedents.This detailed analysis of the judgment highlights the key issues, legal reasoning, and the Tribunal's decision, ensuring a comprehensive understanding of the case.
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