2011 (1) TMI 87 - AT - Central Excise

Cenvat credit - respondents are required to pay amount in terms of Rule 6 (3) (b) of Cenvat Credit Rules as they have not maintained separate accounts in respect of common inputs which has been used for exempted products - prayer is for setting the aside the order of the Commissioner (Appeals) - grounds of appeal is that the decision of the Hon ble High Court of Bombay in the case of Rallies India Ltd. which has been relied upon by the Commissioner (Appeals) was proposed to be appealed against - Commissioner (Appeals) has allowed the appeal also following the decision of the Tribunal in the case of respondent s own case in an identical matter - appeal against the order of the Commissioner (Appeals) which upheld the order of the original authority which was in favour of the party, rejected

Summary

Issues: Appeal against order dropping proceedings initiated against the respondents, Requirement to pay amount under Rule 6 (3) (b) of Cenvat Credit Rules for not maintaining separate accounts for common inputs used for exempted products.

The judgment pertains to an appeal by the department against the order of the Commissioner (Appeals) where the proceedings initiated against the respondents were dropped, and this decision was upheld. The department challenged the concurrence findings in favor of the assessee. The department argued that the respondents should pay the amount under Rule 6 (3) (b) of Cenvat Credit Rules as they failed to maintain separate accounts for common inputs used for exempted products. However, the appeal did not include the order of the original authority or the show cause notice. The department's prayer to set aside the order of the Commissioner (Appeals) was deemed without proper application of mind as it would only revive an order against the department. The department also contested the reliance on a decision of the Hon'ble High Court of Bombay by the Commissioner (Appeals), stating their intention to appeal against it. The Tribunal held that the mere proposal to appeal against the High Court's decision does not warrant interference with the Commissioner's order. Furthermore, the Commissioner (Appeals) had based the decision on a Tribunal ruling in the respondent's own case, which the department failed to show as inapplicable to the present case. Consequently, the appeal against the order upholding the original authority's decision in favor of the party was rejected.

In conclusion, the judgment dealt with the department's appeal against the dropping of proceedings against the respondents. The issue of not maintaining separate accounts for common inputs used for exempted products under Rule 6 (3) (b) of Cenvat Credit Rules was raised. The Tribunal dismissed the appeal, emphasizing the lack of proper grounds and failure to demonstrate the inapplicability of previous decisions relied upon by the lower authorities.