By TIOL News Service

AHMEDABAD, JUNE 25, 2018: THE department has challenged the judgement of Tribunal raising following question for consideration:

Whether the Tribunal is right in law to rely upon the decision of Ahmedabad Tribunal in case of M/s. Swiss Parenterals Pvt. Ltd - 2014-TIOL-1078-CESTAT-AHM as in said case the matter was remanded for verification of appellant's claim of reversal of Cenvat credit on inputs attributable to manufacture of exempted final products Rule 6 of CCR, 2004?

Assessee is a manufacturer of ceramic products. There arise byproducts called body clay powder which envisage nil rate of duty. The assessee did not maintain separate accounts and initially availed cenvat credit in respect of exempted product also. However, subsequently, such credit was reversed with interest.

The department, however, objected to such procedure.

The appellate authority and the Tribunal held that since the assessee had reversed the cenvat credit with interest, no further adverse consequence should follow.

The High Court noted that in the case of Ashima Dyecot Ltd - 2008-TIOL-659-HC-AHM-CX it was held that reversal of credit amounts to non-availment.

Concluding that there is no error in the view taken by the Tribunal, the same was upheld and the Revenue appeals were dismissed.

(See 2018-TIOL-1169-HC-AHM-CX)