West Coast Pharmaceutical Works Ltd Vs C.C.E. (CESTAT Ahmedabad)
The case of West Coast Pharmaceutical Works Ltd Vs C.C.E.-Ahmedabad, before the CESTAT Ahmedabad, concerns the confirmation of an amount equivalent to 5%/10% of the value of exempted goods by the Adjudicating Authority, despite the appellant having already reversed proportionate Cenvat Credit.
The appellant contended that in their own case for a different period, the tribunal had remanded the matter on the same issue. Further, the appellant cited various judgments in support of the argument that when the proportionate credit was reversed, the demand under Rule 6(3) of the Cenvat Credit Rules could not sustain.
The Revenue, while reiterating the findings of the original order, did not object to the matter being remanded.
Upon examination, the Tribunal found a precedent in an earlier case involving the same appellant and identical issue, only for a different period. The Tribunal had remanded the earlier case back to the Adjudicating Authority. Given the similarities, the Tribunal decided to remand this case too, setting aside the original order.
The Tribunal’s decision emphasized that the Cenvat Credit Rules’ objective is to prevent the assessees from availing Cenvat Credit on inputs or input services used in the manufacture of exempted goods or services, rather than extracting an undue amount from them.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that whether the Adjudicating Authority was right in confirming an amount equivalent to 5%/ 10% of the value of exempted goods when the appellant had already reversed proportionate Cenvat Credit.
2. Shri, Amal Dave Learned Counsel appearing on behalf of the appellant at the outset submits that in the appellant’s own case only for the different period on the same issue remanded the matter vide final order no A13152/131153-2017 dated 06-10-2017. He request that this matter may also be remanded for deciding the matter as per the observation made by this tribunal in their own case cited (Supra).
2.1 He further submits that this issue was otherwise considered in various judgments and the tribunal has taken a view that when the proportionate credit was reversed the demand of 5%, 10% under Rule 6(3) of Cenvat Credit Rules shall not sustain. He placed reliance on the following judgment:
