Reversal under rule 6(3) of CCR, 2004 doesn’t apply when CENVAT attributable to non-excisable goods not availed

Hindustan Colas Pvt. Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)

CESTAT Kolkata held that provisions of rule 6(3) of the CENVAT Credit Rules, 2004 is not applicable when CENVAT Credit attributable to non-excisable goods not availed. Accordingly, demand set aside.

Facts- The Appellant, M/s. Hindustan Colas Pvt. Ltd, manufactures dutiable/ excisable goods such as bitumen emulsion, road bond emulsion etc. The Appellant also produces non excisable products like Crumb Rubber Modified Bitumen (“CRMB”) and Polymer Modified Bitumen (“PMB”).

During the period FY 2013 – 2014 to FY 2017 – 2018 (till June 2017), the Appellant used common inputs (Bitumen VG10, Bitumen VG 30 etc.) and input services (manpower recruitment, legal consultancy, GTA, rent-a-cab, security, courier etc.) for manufacture of dutiable goods as well as for production of non-excisable goods like CRMB and PMB.

For the period up to June 2013, the Appellant availed CENVAT credit and subsequently reversed the credit availed on common input and input services used for production of non-excisable goods in terms of Rule 6(3) of the CENVAT Credit Rules, 2004 and such reversal was shown by the Appellant in its ER-1 returns.

Please become a Premium member. If you are already a Premium member, login here to access the full content.