Tribunal Overturns Duty Demand on Exempt Biscuit Price Hike; Cenvat Credit Reversal Upheld for Mixed Goods Manufacturing.

The Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The appellant, involved in manufacturing excisable goods, had availed Cenvat credit on inputs for both exempted and dutiable goods without separate accounts as per Rule 6(3)(b) of the CENVAT Credit Rules, 2004. The dispute emerged over duty demands following an increase in the retail price of exempted biscuits. The appellant reversed the credit with interest prior to the Show Cause Notice. The Tribunal, considering relevant case laws and amendments, concluded that the demand for 10% of the value of exempted goods was unsustainable.

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Issues involved: Appeal against Order-in-Original regarding availing of cenvat credit on inputs for both exempted and dutiable goods without maintaining separate accounts u/r 6(3)(b) of CENVAT Credit Rules, 2004.

The appellant, engaged in manufacturing excisable goods, availed cenvat credit on inputs for both exempted and dutiable goods without maintaining separate accounts as required u/r 6(3)(b) of CENVAT Credit Rules, 2004. The dispute arose when the retail price of exempted biscuits increased, leading to demands for payment of duty. The appellant reversed the credit with interest before the issuance of the Show Cause Notice, arguing that the demand cannot be sustained. The Tribunal considered relevant case laws and amendments to the Cenvat Credit Rules, 2004, and concluded that the demand of 10% of the value of exempted goods cannot be upheld due to the reversal of credit with interest. The impugned order was set aside, and the appeal was allowed in favor of the appellant.

Key points:
1. Appellant availed cenvat credit on inputs for both exempted and dutiable goods without maintaining separate accounts.
2. Dispute arose when the retail price of exempted biscuits increased, leading to demands for payment of duty.
3. Appellant reversed the credit with interest before the issuance of the Show Cause Notice.
4. Tribunal considered relevant case laws and amendments to the Cenvat Credit Rules, 2004.
5. Concluded that the demand of 10% of the value of exempted goods cannot be upheld due to the reversal of credit with interest.
6. Impugned order set aside, and the appeal allowed in favor of the appellant.

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