The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the case to the Adjudicating Authority regarding the 8%/10% payment on electricity, citing the reversal of Cenvat credit .
Gujarat Alkalies And Chemicals Ltd,appellant-assessee,contested the liability to pay 8%/10% on the value of electricity sold to the State Electricity Board under Rule 6(3A) of the Cenvat Credit Rules, 2004, due to the use of common inputs and input services for both excisable goods and exempted electricity.
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The assessee’s counsel,pointed out that the Tribunal had remanded the matter in the assessee’s case through final order No. 13053-13060/2024 dated 03.12.2024. He mentioned that in one appeal, the reversal was done yearly, while in the others, it was done monthly as per Section 3(6A) of the Cenvat Credit Rules, 2004.
The tribunal, after considering both sides submissions and reviewing the records, remanded the case to the adjudicating authority in the appellant’s earlier matter. The issue was whether the appellant was liable to pay 8%/10% on electricity sold to the State Electricity Board under Rule 6(3A) of the Cenvat Credit Rules, 2004, due to the use of common inputs/services. The assessee had reversed the proportionate Cenvat credit, which was acknowledged by the adjudicating authority.
A single member bench comprising Ramesh Nair ( Judicial Member ) noted that since the reversal had been made, the demand for 8%/10% was unsustainable, supported by various judgments. The Revenue’s counsel reiterated the impugned order’s findings, but the tribunal found that the reversal of credit negated the demand.
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The remaining issue was the payment of interest, if applicable, and the assessee was instructed to submit interest calculations to the adjudicating authority for verification.
The matter was remanded for the adjudicating authority to decide afresh, considering the assesse’s monthly reversal in most appeals, with no case for the demand of 8%/10%.
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