Case Law Details
Aurum Pharmachem Private Limited Vs Commissioner of CGST & Excise (CESTAT Kolkata)
Issue that has to be considered in the present appeal is whether the Appellant not having maintained separate accounts in respect of the common input services used for manufacture of dutiable final products as well as exempted goods is mandatorily required to pay an amount equal to 5% (effective up to 16.03.2012) and 6% (w.e.f.17.03.2012) of the value of exempted goods.
CESTAT find that the aforesaid issue is no more res integra and has been considered in a catena of judgments. In the present case, the Appellant has reversed the credit attributable to the common input services used in or in relation to the manufacture of exempted goods.
Tribunal in the case of Philips Carbon Black Limited [Final Order No.FO/76973-76975/2019 dt.17.12.2019] had held that non-compliance of the procedure prescribed under Rule 6(3A) of the Cenvat Credit Rules, 2004 does not result in loss of substantive right of the assessee to avail the option of reversing proportional credit and such non-compliance is at best a procedural lapse, which can be condoned.
Hon’ble Supreme Court in the case of Chandrapur Magnet Wires [1996 (81) ELT 3 (SC)] has held that reversal of credit along with interest amounts to a situation, which is akin to as if the assessee had never availed such credit at the first place.
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