Reversal of CENVAT credit for common facilities requires Rule 6 compliance; residual ineligible credit must be reversed with interest.

Reversal of CENVAT credit for common facilities hinges on compliance with Rule 6 procedures: proportionate reversal principles apply differently for periods before April 2008 (no prescribed monthly proportionate reversal; limited utilisation) and after April 2008 (monthly provisional reversals under the amended rule with annual final adjustment). Maintenance of separate accounts from receipt and monthly reversals, verifiable by competent certification, satisfies the procedural requirement and mitigates disallowance; however, a residual inadmissible credit balance of 29,24,565 must be reversed with interest. Certifications must demonstrate conformity with Rule 6 recordkeeping and monthly/annual reconciliation requirements.

---

---

Issues Involved:
1. Separate accounts maintenance as per Cenvat Credit Rules (CCR), 2004.
2. Voluntary payment and short payment of service tax.
3. Reversal of Cenvat credit.
4. Compliance with Rule 6 of CCR, 2004.

Summary:

1. Separate Accounts Maintenance:
The appellant, M/s. Trans Asia Shipping Services Pvt. Ltd., was alleged to have not maintained separate accounts for taxable and exempted services as per Cenvat Credit Rules (CCR), 2004. An investigation revealed that the appellant voluntarily paid Rs. 23,04,355/- as short payment due to erroneous credit on common input services and Rs. 3,98,281/- as interest. However, demands were made for the period from May 2006 to March 2010 due to the utilization of ineligible CENVAT credit. The appellant was also alleged to have not exercised any option by intimating the jurisdictional Range officer as per Rule 6 of CCR, 2004 for the period from 2011 to 2013, and a reversal of Cenvat credit was proposed.

2. Voluntary Payment and Short Payment of Service Tax:
The appellant voluntarily paid certain amounts during the investigation, but it was alleged that these payments were short of the actual service tax due. The adjudicating authority confirmed the demands for the period from May 2006 to March 2011. The appellant filed appeals against these orders.

3. Reversal of Cenvat Credit:
The adjudicating authority dropped proceedings for the period from 01.04.2011 to 31.03.2012 after obtaining a report from the Range Officer, which confirmed that the appellant maintained proper accounts. The Revenue's appeal against this order was dismissed by the Tribunal and later by the Hon'ble High Court of Kerala, which upheld that the appellant maintained separate accounts in compliance with Rule 6(2) of CCR, 2004.

4. Compliance with Rule 6 of CCR, 2004:
The Tribunal directed the appellant to produce documentary evidence, including invoices and CENVAT credit details, for verification. The Range Officer confirmed that the appellant maintained separate accounts as required under Rule 6(2) of CCR, 2004. The Tribunal, relying on the Range Officer's report and the Chartered Accountant's certificate, found that the appellant complied with the provisions of Rule 6 of CCR, 2004.

Final Decision:
The Tribunal allowed the appeals filed by the appellant for the periods in question, subject to the payment of Rs. 29,24,565/- along with interest. The Tribunal concluded that the appellant maintained separate accounts and complied with the provisions of Rule 6 of CCR, 2004. The appeals were allowed with consequential relief as per law.

---