Commissioner Of Central Excise vs M/S.Gujrat Narmada V.Fertilizers ...

The Supreme Court ruled that under Rule 6(1) of the CENVAT Credit Rules, 2002, the assessee is not required to reverse the CENVAT credit for Low Sulphur Heavy Stock (LSHS) used as fuel in the production of exempted goods, specifically fertilizers. The Court upheld the decision of the CESTAT, which found that LSHS, when used as fuel, qualifies for credit as it falls under the exception provided in sub-rule (2) of Rule 6. Consequently, the disallowance of CENVAT credit by the Commissioner was overturned, affirming the admissibility of the credit for the disputed periods.