S.S.Kang
Heard both sides.
2. Common issue is involved in these appeals therefore are taken up for together.
3. The applicant field these applications for total waiver of pre-deposit of duty of Rs.24,22,487/-, interest and penalty. The applicant has already paid reversal of credit amounting to Rs.2,47,401/- and Rs.1,25,212/-.
4. The contention of applicant is that the demand is confirmed on the ground that applicants are availed credit in respect of the common inputs i.e. packing material used in or in relation to the manufacture of dutiable as well as exempted goods. The demand is confirmed in view of the provisions of Rule 6 of CENVAT Credit Rules. On the ground that the applicants are liable to pay 10% of the price of exempted goods as applicants were not maintaining separate records in respect of inputs used in the manufacture of exempted goods.
5. Applicant submitted that the provision of Rule 6 of the CENVAT Credit Rules has been amended retrospectively by the Finance Act, 2010. In such cases proportionate reversal of the credit in respect of inputs used in the manufacture of exempted goods is sufficient. The contention is that as applicant has already reversed the proportionate credit availed in respect of input used in the manufacture of exempted goods. Therefore, the conditions of Rule 6 as amended by Finance Act, 2010 are satisfied. The demand is not sustainable applicant also pleaded that part of the demand is time bar.
6. Revenue relied upon the provisions of Rule 6 of the CENVAT Credit Rules which during the period in dispute provide payment of 10% of the price of exempted goods in case the common inputs are used in the manufacture of dutiable as well as exempted goods without maintaining separate accounts.
7. We find that provisions of Rule 6 of CENVAT Credit Rules and are amended retrospectively by Finance Act, 2010 whereby the proportionate reversal of credit in respect of the input used in the manufacture of exempted goods. In view of the above, the retrospective amended and in view of the fact that the applicant has already reversed the credit in respect of the input used in the manufacture of exempted goods the pre-deposit of remaining amount of duty, interest and penalty is waived. Stay petition is allowed.
8. Further we find that the demand is made in view of the provisions of Rule 6 of CENVAT Credit Rules which was amended retrospectively by Finance Act, 2010. Therefore, the matter requires reconsideration by the adjudicating authority. The impugned order is set aside and the matter is remanded to the adjudicating authority to decide afresh after affording opportunity of hearing to the appellant. The appeals are allowed by way of remand.