2014 (8) TMI 331 - AT - Central Excise

CENVAT Credit - packing material - reversal @ 8% under Rule 6(3)(b) of CENVAT Credit Rules, 2001 & 2002 - Non maintenance of seperate accounts - Whether appellant maintained separate accounts of common inputs used in the manufacture of dutiable and exempted final products - Invocation of extended period of limitation - Held that - there is nothing on record that the entire CENVAT Credit with respect to common packing material, used for manufacturing dutiable and exempted final products has been reversed by the appellant. In the absence of such data it cannot be said that appellant has reversed the entire credit with respect to packing material used in the manufacture of dutiable and exempted final products. There is also no indication from the records to establish that appellant was maintaining separate accounts at all with respect to dutiable and finished excisable goods. On merits appellant has no case. Further, the issue was detected first by the Revenue during Audit, therefore, extended period will be applicable in these proceedings - Decided against assessee.

Summary

Issues:
Reversal of CENVAT Credit @ 8% under Rule 6(3)(b) of CENVAT Credit Rules, 2001 & 2002 due to lack of separate accounts for common inputs used in manufacturing dutiable and exempted final products.

Analysis:
The appeal was filed concerning the upholding of OIO No.66/D/2006, which required the appellant to reverse CENVAT Credit @ 8% under Rule 6(3)(b) of CENVAT Credit Rules, 2001 & 2002 for not maintaining separate accounts of common inputs used in manufacturing dutiable and exempted final products. The first appellate authority rejected the appellant's argument of having maintained separate accounts. Despite multiple opportunities for the appellant to appear, no representation was made during the hearings. The Revenue argued that the appellant failed to show separate accounts during scrutiny for the year 2003-04, as required by law.

The lower authorities concluded that the appellant did not maintain separate accounts, as confirmed by the absence of such records during an audit. The appellant's reliance on a Supreme Court judgment was deemed insufficient, as there was no evidence of the complete reversal of CENVAT Credit for common packing material used in both dutiable and exempted final products. The absence of records indicating separate accounts further weakened the appellant's case. The Revenue detected the issue during an audit, justifying the application of the extended period for proceedings.

The Tribunal found the appellant's lack of participation in the proceedings concerning. As a result, the appeal was dismissed both on its merits and due to non-prosecution. The order was pronounced in court, confirming the dismissal of the appeal.