2014 (1) TMI 733 - AT - Central Excise

Exempted as well as dutiable goods manufactured - Glass panels and other articles of glass Separate accounts not maintained Waiver of Pre-deposit - Assessee contended that they were not availing the credit for those inputs which were used in the manufacture of exempted final products Held that - The appellants were either reversing the credit or not utilizing the credit in respect of inputs used in the manufacture of exempted final product - At the most, it can be a question of quantification of such non- utilization of credit Pre-deposits waived till the disposal - Unconditional stay granted.

Issues involved:
1. Maintenance of separate records for inputs used in exempted and dutiable final products.
2. Liability to pay 10% of the value of final exempted products due to lack of separate accounts.
3. Applicability of Rule 6(3)(b) for reversal of credit on a proportionate basis.
4. Quantification of non-utilization of credit for inputs in exempted final products.
5. Granting unconditional stay based on a previous Tribunal decision.

Issue 1: Maintenance of separate records for inputs used in exempted and dutiable final products
The judgment revolves around the challenge of maintaining separate records for inputs used in the manufacture of exempted and dutiable final products. The Commissioner noted the difficulty in correlating the quantity of inputs consumed due to the diverse range of products manufactured and the discrepancy in units of measurement between inputs and final products. The lack of separate records led to the imposition of liability under Rule 6(3)(b) for non-compliance.

Issue 2: Liability to pay 10% of the value of final exempted products due to lack of separate accounts
The primary contention was whether the appellant, engaged in manufacturing glass products, should be held liable to pay 10% of the value of final exempted products due to the absence of separate accounts for inputs used in exempted and dutiable goods. The Commissioner's decision was based on the failure to maintain distinct records, leading to the imposition of the prescribed amount under Rule 6(3)(b).

Issue 3: Applicability of Rule 6(3)(b) for reversal of credit on a proportionate basis
The judgment analyzed the applicability of Rule 6(3)(b) concerning the reversal of credit on a proportionate basis for inputs used in the manufacture of exempted final products. The Commissioner found the reversal of credit inadequate due to the challenges in segregating inputs for exempted and dutiable goods, ultimately holding the party liable to pay the specified amount.

Issue 4: Quantification of non-utilization of credit for inputs in exempted final products
The Tribunal highlighted that the appellants were either reversing or not utilizing the credit for inputs used in the manufacture of exempted final products. The issue centered on quantifying the non-utilization of credit, emphasizing the need for accurate record-keeping and compliance with Cenvat credit regulations.

Issue 5: Granting unconditional stay based on a previous Tribunal decision
The Tribunal referenced a previous case involving Geeta Glass Works to support its decision to grant an unconditional stay in the present matter. By following the precedent set in the earlier case and considering the identical nature of the orders, the Tribunal dispensed with the requirement of pre-deposit of duty and penalty, allowing the stay petition without conditions.

This comprehensive analysis of the judgment addresses the key issues surrounding the maintenance of separate records, liability for exempted products, Rule 6(3)(b) compliance, quantification of credit non-utilization, and the granting of an unconditional stay based on precedent.

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