Tribunal allows appeal despite procedural lapse, credits reversal upheld.

The Tribunal set aside the demand for payment of 6% of the value of exempted goods due to the appellant's non-filing of a declaration for opting of proportionate reversal of credit. Despite the procedural lapse, the appellant's timely reversal of the credit was deemed valid, following the Supreme Court's precedent that once credit is reversed, the Rule may not apply. The Tribunal concluded that the appellant's option for proportionate reversal of credit was valid, ultimately allowing the appeal in favor of the appellant.

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Issues:
1. Whether non-filing of a declaration for opting of proportionate reversal of credit under Rule 6(3)(A) of Cenvat Credit Rules, 2004, renders the appellant liable to pay 6% of the value of exempted goods.
2. Whether the procedural lapse of not filing a declaration can be condoned if the appellant has reversed the proportionate credit on the due date.
3. Whether the appellant's option for proportionate reversal of credit is valid even without filing the declaration.

Analysis:
1. The appellant, engaged in manufacturing pharmaceutical goods, availed Cenvat Credit for common inputs used in manufacturing both dutiable and exempted goods. The department demanded 6% of the value of exempted goods due to the appellant not filing a declaration for opting of proportionate reversal of credit. The Commissioner (Appeals) upheld the demand, citing non-compliance with Rule 6(3)(A) of Cenvat Credit Rules, 2004.

2. The appellant argued that the procedural lapse of not filing the declaration should be condoned since they reversed the proportionate credit on time. The appellant relied on various judgments to support their stance. The Authorized Representative contended that without filing the declaration, the appellant cannot avail the option of proportionate credit, citing relevant case laws.

3. The Tribunal analyzed the submissions and records, noting that the appellant had indeed reversed the proportionate credit. Referring to the Supreme Court's decision in a previous case, the Tribunal held that once the credit is reversed, the Rule may not be applicable. The Tribunal emphasized that the non-filing of the declaration was a procedural requirement, and the essential details were available with the department. Therefore, the Tribunal concluded that the appellant's option for proportionate reversal of credit was valid, and no further payment could be demanded.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The judgment highlighted that the appellant's reversal of proportionate credit, despite the procedural lapse of not filing a declaration, was valid.

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