Intimation under Rule 6(3A) is procedural; belated proportionate reversal cannot be rejected but amounts and interest must be verified.

Whether intimation to the jurisdictional superintendent under Rule 6(3A) of the Cenvat Credit Rules is substantive or procedural: the requirement is procedural and failure to give prior intimation does not justify rejection of a belated proportionate reversal. The rule prescribes calculation, provisional payment, annual finalisation, formulae and interest; correctness of the reversed amount and interest must be verified under the rule (including amended interest provisions). The matter is to be remitted for adjudicatory verification of the proportionate reversal and interest, with a remand order to be passed within eight weeks after submission of required details.

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Issues: Whether exercising the option for reversal of Cenvat credit by intimating the Jurisdictional Range Superintendent as required under Rule 6(3A) of the Cenvat Credit Rules, 2004 is a substantive mandatory condition or a procedural requirement.

Analysis: Rule 6(3A) prescribes a procedure for calculation, provisional payment, final determination and intimation to the Superintendent in respect of Cenvat credit attributable to exempted goods and exempted services, and contains specific clauses dealing with particulars to be intimated, monthly provisional payment, annual finalisation, payment of interest and post-payment intimation. W.e.f. 01.04.2016 the Rule was amended by Notification No. 23/2016-CE(NT) to prescribe detailed formulae and interest rates. The requirement to furnish name, address, registration number, date of exercise of option and descriptions of inputs/goods/services are generally data already available to the department through statutory returns. Precedents recognising that reversal of credit effected before removal or prior to taking credit can amount to non-taking of credit were considered. Having regard to the nature of the particulars and the statutory scheme under Rule 6(3A), the intimation requirement is procedural in character and is not equivalent to the strict substantive conditions attached to exemption notifications issued under Section 5A of the Central Excise Act, 1944. However, correctness of the amount reversed and interest payable under the rule involves application of the formulae and rates in Rule 6(3A) (including the amended interest provisions) and requires verification of details submitted by the manufacturer to determine any balance payable.

Conclusion: The requirement to intimate the Jurisdictional Range Superintendent under Rule 6(3A) of the Cenvat Credit Rules, 2004 is a procedural requirement; the belated proportionate reversal already made by the respondent cannot be rejected solely for failure to file prior intimation. The matter is remitted to the Adjudicating Authority to verify correctness of the proportionate reversal and interest in accordance with Rule 6(3A) and to pass a remand order within eight weeks from submission of requisite details by the respondent.

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