Tribunal Overturns Orders, Remands for Fresh Adjudication; Appellant Not Liable Under Cenvat Credit Rules with Reversed Credit.

The Tribunal set aside the impugned orders and allowed the appeals, remanding the case to the Adjudicating Authority for fresh adjudication. It concluded that the appellant is not liable to pay 5%/6% on exempted goods under Rule 6(3) of the Cenvat Credit Rules, 2004, if they reverse the proportionate credit of common input services used for exempted goods. Additionally, the Tribunal noted a strong prima facie case regarding the time-bar issue, with no suppression of facts by the appellant.

---

---

Issues involved:
The issue in the present case is whether the appellant is liable to pay 5%/6% on the value of exempted goods (Sodium Chloride 'salt') under Rule 6(3) of the Cenvat Credit Rules, 2004, where Cenvat credit was availed on common input service used for both dutiable and exempted goods.

Details of appeals:
1. Appeal No. E/12029/2015-DB, Amount: Rs. 25,45,309/-, Period: July 2009 to June 2012, SCN Date: 08-08-2014, Remarks: Demand issued, Time Barred.
2. Appeal No. E/11700/2016-DB, Amount: Rs. 25,75,828/-, Period: July 2012 to February 2014, SCN Date: 11-09-2014, Remarks: Refund matter.
3. Appeal No. E/12058/2017-DB, Amount: Rs. 5,78,301/-, Period: September 2014 to March 2015, SCN Date: 23-09-2015, Remarks: Refund matter.

Appellant's submission:
The appellant did not avail Cenvat credit for inputs used in processing Sodium Chloride, stating it involves no cenvatable input. They believed they were not required to pay 5%/6% on exempted goods due to not availing any credit. The appellant is willing to reverse the proportionate Cenvat credit attributed to exempted goods with interest.

Legal arguments:
The appellant cited various judgments to support their case, emphasizing that if the credit is reversed along with interest, the demand of 5%/6% under Rule 6(3) of Cenvat Credit Rules, 2004 should not be sustained.

Revenue's stance:
The revenue representative reiterated the findings of the impugned order without additional arguments.

Tribunal's decision:
After considering submissions and records, the Tribunal found that if the appellant reverses the proportionate credit of common input service for exempted goods, the demand of 5%/6% under Rule 6(3) shall not be sustainable. The Tribunal also noted a strong prima facie case regarding time bar with no suppression of facts by the appellant. The impugned orders were set aside, and the appeals were allowed for fresh adjudication by the Adjudicating Authority.

Conclusion:
The Tribunal allowed the appeals by remanding the case to the Adjudicating Authority for a fresh decision based on the above terms, emphasizing the importance of complying with the provisions of the law.

---