CESTAT Allows Refund Of Amount Reversed In CENVAT Credit Account To Reliance Industries

Mariya Paliwala

11 Oct 2022 6:30 AM GMT

  • Whatsapp
  • Linkedin
  • Whatsapp
  • Linkedin
  • Whatsapp
  • Linkedin
    • Whatsapp
    • Linkedin
    • Whatsapp
    • Linkedin
    • Whatsapp
    • Linkedin
  • CESTAT Allows Refund Of Amount Reversed In CENVAT Credit Account To Reliance Industries

    The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Reliance Industries Ltd. was ineligible for a refund of amounts that had, inadvertently, been reversed in the CENVAT credit account under rule 6(3A) of the CENVAT Credit Rules, 2004 between April 2010 and March 2011.The two-member bench of Ajay Sharma (Judicial Member) and C.J. Mathew...

    The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Reliance Industries Ltd. was ineligible for a refund of amounts that had, inadvertently, been reversed in the CENVAT credit account under rule 6(3A) of the CENVAT Credit Rules, 2004 between April 2010 and March 2011.

    The two-member bench of Ajay Sharma (Judicial Member) and C.J. Mathew (Accountant Member) has observed that Reliance Industries has not used any incremental input and input services for the manufacture of an exempted quantity of LPG and the entire quantum of inputs and input services was required for the manufacture of dutiable finished goods.

    The appellant/Reliance Industries Ltd is a manufacturer of excisable goods and had availed credit under the CENVAT Credit Rules, 2004 on eligible "inputs" used in the manufacture of excisable goods. But, under the impression that "liquefied petroleum gas (LPG)", exempted by notification no. 4/2006-Central Excise Act, 1944 dated 1st March 2006, when cleared for use under the "public distribution system (PDS)" were "exempted goods" within the meaning of rule 2(d) of CENVAT Credit Rules, 2004, reversed such proportion and also excluded it for the computation prescribed in rule 6(3A) of CENVAT Credit Rules, 2004. According to the appellant, the goods cleared were not "exempt goods".

    Rule 6(3A) proportionately divides the credit taken on common input services and credit attributable to exempted service was denied.

    The CESTAT stated that rule 6 of the CENVAT Credit Rules, 2004 is inoperable ab initio in clearances of the 'exempted goods', allowed the appeal and set aside the order.

    Case Title: Reliance Industries Ltd Versus Commissioner of Central Excise

    Citation: Excise Appeal No. 1498 Of 2012

    Date: 26.09.2022

    Counsel For Appellant: Advocates Ramnath Prabhu and Shri Anil Balani

    Counsel For Respondent: Joint Commissioner (AR) Dhirendra Kumar

    Click Here To Read Order


    Next Story