𝗖𝗘𝗦𝗧𝗔𝗧 𝗔𝗵𝗺𝗲𝗱𝗮𝗯𝗮𝗱 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗮𝗻𝗱 𝗖𝗲𝗻𝘃𝗮𝘁 𝗖𝗿𝗲𝗱𝗶𝘁 𝗥𝗲𝘃𝗲𝗿𝘀𝗮𝗹 📢 𝗧𝗵𝗲 𝗧𝗿𝗶𝗯𝘂𝗻𝗮𝗹 𝗿𝘂𝗹𝗲𝗱: "Demand for reversal of credit cannot be made when the respondent has admittedly paid back the entire Cenvat credit along with interest – It became as if no Cenvat credit is availed."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: Galaxy Diesel & Electricals 𝗜𝘀𝘀𝘂𝗲: The respondent, Galaxy Diesel & Electricals, did not maintain separate accounts for input services used in exempted goods. Consequently, it was alleged that they must pay an amount at the rate of 8%/6%/5% as per Rule 6(3) of the Cenvat Credit Rules, 2004.

⚖️ 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: The Tribunal held that once Cenvat credit for exempted services is fully reversed with interest, demands under Rule 6(3) are unsustainable. Citing Chandrapur Magnet Wires Pvt. Ltd. vs. CCE, it ruled that repayment effectively nullifies credit use. Thus, Galaxy Diesel & Electricals’ demand was invalid, dismissing the revenue’s appeal.

📜 𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: Commissioner of Central Excise & ST, Rajkot vs. Galaxy Diesel & Electricals 𝗦𝗘𝗥𝗩𝗜𝗖𝗘 𝗧𝗔𝗫 𝗔𝗽𝗽𝗲𝗮𝗹 𝗡𝗼. 11147 of 2014-DB 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 19 June 2023 📜 This ruling reinforces that if Cenvat credit used for exempted services is fully reversed along with interest, no further demand under Rule 6(3) is sustainable.