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Rule 6 of CENVAT Credit Rules is clearly designed to deny partial credit of CENVAT credit taken on inputs/input services used in exempted goods and services

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Court :
Commissioner of Central Taxes (Appeals) Jaipur]

Brief :
This appeal has been filed by M/s. Honda Cars India Ltd against demand of reversal of CENVAT Credit in terms of Rule 6(3A) of the CENVAT Credit Rules, 2004.

Citation :
Excise Appeal No. 54157 of 2018

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

NEW DELHI

PRINCIPAL BENCH
Excise Appeal No. 54157 of 2018

[Arising out of Order-in-Appeal No. 439-440 (SM)CE/JPR/2018 dated October 15,
2018 passed by the Commissioner of Central Taxes (Appeals) Jaipur]

HONDA CARS INDIA LIMITED ... Appellant
SPL-1(D), RIICO Industrial Area
Tapukara, District Alwar
Rajasthan 301707.

Versus

COMMISSIONER OF CENTRAL GOODS ... Respondent
AND SERVICE TAX, CUSTOMS AND
CENTRAL EXCISE, ALWAR.

A Block, Surya Nagar,
Alwar, Rajasthan 229001.

APPEARANCE:
Shri B L Narasimhan and Kruti Parashar, Advocates for the Appellant
Shri Rakesh Agarwal , Authorised Representative for the Department

CORAM:
HON’BLE MR. JUSTICE DILIP GUPTA, PRESIDE
NT
HON’BLE MR. RAJU, MEMBER (TECHNICAL)

DATE OF HEARING : February 09, 2021
DATE OF DECISION : February 22, 2021

FINAL ORDER NO. 51046/2021

PER MR RAJU 

This appeal has been filed by M/s. Honda Cars India Ltd against demand of reversal of CENVAT Credit in terms of Rule 6(3A) of the CENVAT Credit Rules, 2004.

2. Learned Counsel for the appellant pointed out that theappellants are engaged in packing and labelling of automobile partsand safety headgear. The appellants are also engaged in trading ofdyes which they get manufactured on job work and appellants are also engaged in supply of manpower services for manufacture of dyes inhouse. The appellants were therefore, engaged in activities which were liable to tax and also in trading activities which were notliable to service tax. Consequently, they became liable for reversalof CENVAT Credit in terms of Rule 6 of CENVAT Credit Rules, 2004.The appellants were not maintaining separate records of receipt,consumption of inventory of inputs and input services in terms ofRule 6(2) of CENVAT Credit Rules, 2004 and therefore, they opted topay CENVAT Credit as determined under Rule 6(3A) of CENVATCredit Rules, 2004 in terms of Rule 6(3)(ii) of CENVAT Credit Rules, 2004. The appellants were from time to time reversing the credit asprescribed under Rule 6(3A) in terms of formula prescribed therein.The appellants were submitting the detailed calculation on saidreversal to the Revenue from time to time on annual basis. LearnedCounsel pointed out that the amount of reversal was calculated by them in terms of Rule 6(3A)(c)(iii). He pointed out that the said clause (c) of sub-rule 3A of Rule 6 reads as under:

To know more in details find the attachment file
 

 

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on 15 March 2021
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