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Cenvat credit on common inputs eligible only in terms of rule 6 when excisable & exempted products are manufactured
Case Law Details
- Case Name
- The Commissioner of Central Excise Vs M/s. Nicholas Piramal (India) Ltd. (Bombay High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Bombay High Court
Commissioner of Central Excise Vs. Nicholas Piramal (India) Ltd. (Mumbai High Court)- The Honourable Tribunal was right in allowing the assessee for reversal of credit taken, instead of insisting upon the assessee to pay an amount equal to 8% or 10% of total price of the exempted goods as per the Rules 6(3)(b) of Cenvat Credit Rules 2002 . Cenvat credit on common inputs eligible only in terms of rule 6 when excisable & exempted products are manufactured. Credit can be availed only in terms of rule 6(3) and reversal of pro rata credit not permissible. Judgement of Chandrapur Magnet disting...
iT IS SEEN THAT THE ABOVE JUDGMENT OF THE BOMBAY hc ITSELF HAS BEEN CORRECTED BY A CORRIGENDUM AND THE WORDS OF THE LAST PARAGRAPH HAS BEEN CORRECTED TO READ AS ”
Pl refer to ELT 2009(244) ELT 321 (Bom)
38 For all the aforesaid reasons ,in our opinion,it is not possible to AGREE with the order of the tribunal and consequently the appeal is ALLOWED.
It is shocking that such a Himalayan blunder is made by the Honourable High Court Judges.
The decision does not hold good in view of the retrospective amendment proposed in rule 6 in the recent Budget 10.
“Rule 57CC, 57AD & Rule 6 of Central Excise Rules, 2001 and rule 6
of Cenvat Credit Rules 2004 are proposed to be amended retrospectively to provide
option to the manufacturer to pay an amount of credit attributable to use of input or input services in the manufacture of exempted goods along with interest of 24%. On payment of such amount demand raised in show cause notice will be set aside.
What is the decision then, how much party has reversed 8% of inputs availed or 8% of exempted goods cleared from premises