TaxTMI 
TaxTMI 
2026 (6) TMI 523
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....ure related to the excise goods. Accordingly, proceedings were initiated for non-adoption of the correct value of total sales and value of exempted sales and adoption of CENVAT credit. Thereafter, show cause notice (SCN) was issued and Adjudication authority as per the impugned order, confirmed the demand for the period from 2013-14 and 2015-16 and appropriated the amount paid by the Appellant. In addition to that, interest and penalties were also confirmed by the Adjudication authority. Aggrieved by said order, present appeal is filed. 3. When the appeal came up for hearing, Learned Counsel for the Appellant submits that the demand of CENVAT credit as per the impugned orders is unsustainable. Learned Counsel further submits that in terms of Rule 6(1), the Appellant is liable to reverse the Cenvat credit availed on account of inputs and input services, which are used in providing exempted services, i.e., 'trading activity'. In the present case, Appellant had determined the amount to be reversed, and the reversal of said credit was intimated to the Department vide letter dated 11.12.2014. The said reversal amount was determined in respect of the common input service....
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....ntion to Circular D.O.F. No. 334/8/2016-TRU dated 29.2.2016 where it has been stated that as per the formula, the full credit of inputs /input services used exclusively in dutiable goods and taxable services excluding exempted goods and exempted services, will be available; only the common credit should be considered for ascertaining the credit to be reversed on the exempted services. Thus, following the above interpretation of the term 'Total Cenvat Credit' in Rule 6(3A)(b)(ii), the Appellant determined the amount and reversed the credit of Rs. 25,31,766/- for the period 201314 and Rs. 3,18,360/- for the period 2014-15 which is as per the following: Particulars 2013-14 2014-15 Total credit reversible on common input services 25,31,766 3,18,860 Credit already reversed (provisionally) under Rule 6(3A) of CCR. 2004 13,85,634 4,99,323 % of turnover of trading goods adopted 15.68% 10% (as against 8.9% as per audited final accounts) Amount reversed during excise audit in April 20,37,550 - Total 34,23,184 4,99,323 Input service credit in respect of trading goods (determined after finalization) and reversed in November 2014 ....
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....as per Rule 6(3D)(c) of CCR, 2004, i.e., difference between sale value & purchase value of the trading goods [A - B] 39,64,48,290 23,10,07,132 D Total value of exempted goods manufactured & removed during the year NIL NIL E Total value of taxable services provided during the year NIL NIL F Total value of dutiable goods manufactured & removed during the year 2,13,13,18,943 2,36,06,61,078 G Total value of exempted services provided + Total value of exempted goods manufactured & removed during the year [C + D] 39,64,48,290 23,10,07,132 H Total value of taxable & exempted services provided + Total value of dutiable & exempted goods manufactured & removed, during the year [F+G] 2,52,77,67,233 2,59,16,68,210 I Total Cenvat credit taken on input services during the year 4,32,07,726 2,56,02,313 J Amount to be reversed as per Rule 6(3A)(c)(iii) of CCR, 2004 [(G/H) x I]] 67,76,585 22,82,050 Total 90,58,635 9. Learned Counsel submits that as per the above, all the values considered remain same except for the value of exempt services i.e., trading goods, which was arrived correctly in the impu....
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.... that though the amendment to Rule 6(3A) vide Notification No.13/2016-CE (N.T) dated 01.03.2016 is by way of 'substitution', following the judgment of Hon'ble High Court of Karnataka in the case of CCE & ST, Bangalore Vs. Fosroc Chemicals (India) Pvt. Ltd in 2015 (318) ELT 240 (Kar.), wherein it is held that since it is clarificatory in nature, it has to be construed as retrospective in nature and the benefit of said Rule has to be extended as if it was there from the inception. Learned Counsel also relied on the decisions in the case of Commissioner of Central Excise & ST, Rajkot Vs. Reliance Industries Limited - 2019 (28) GSTL 96 (Tri. Ahmd). Learned Counsel also draws our attention to the certificate issued by Chartered Accountant regarding the above said calculation and submits that these issues were not considered by the Adjudication authority while assessing the amount payable under Rule 6(3) of the CENVAT Credit Rules, 2004. 11. Learned Authorised Representative (AR) reiterated the finding in the impugned order and submits that the finding is given as per the Audit observation made by the jurisdictional Range officer and submits that Jurisdictional Range....