2013 (8) TMI 466 - AT - Central Excise

Rule 6(3)(b) of Cenvat credit Rules No separate accounts maintained for dutiable as well as exempted goods - Appellant is engaged in the manufacture of barley malt Records revealed the manufacture of malt culms and jao bhusi (cattle feed) - Appellant s contention is that jao bhusi and malt culms are not their product but only a waste Held that - Fact that these goods i.e. malt culms and jao bhusi are regularly being sold by them at the nil rate of duty. Since goods Jao bhusi and the malt culm are cleared at nil rate of duty and appellant is not maintaining separate accounts for dutiable goods as well as for exempted goods - Rule 6(3) are squarely applicable Decided against the Assessee.

Summary

Issues:
1. Appellant's liability under Rule 6(3)(b) of Cenvat Credit Rules for not maintaining separate accounts for dutiable and exempted goods.

Analysis:
The judgment pertains to an appeal filed by M/s. United Breweries Ltd. against an order passed by the Commissioner of Central Excise (Appeals) Chandigarh. The appellant, engaged in the manufacture of barley malt and availing Cenvat credit, was found to be not maintaining separate accounts for dutiable and exempted goods. Consequently, a show cause notice was issued demanding payment at the rate of 10% of the sale price of exempted goods under Rule 6(3)(b) of the Cenvat Credit Rules. The original adjudicating authority confirmed the demand and imposed a penalty, which was upheld by the Commissioner of Central Excise (Appeals) in the impugned order.

During the proceedings, the appellant did not appear for the hearing. The Revenue argued that since the appellant failed to maintain separate accounts for dutiable and exempted goods, they were liable to pay as per Rule 6(3)(b). The Tribunal observed that the appellant indeed engaged in the manufacture of both dutiable and exempted goods without maintaining separate accounts for inputs used in each category. The appellant contended that certain goods were waste and not their products, but these goods were regularly sold at nil rate of duty. As the appellant did not differentiate between dutiable and exempted goods in their accounts, the Commissioner (Appeals) rightly rejected their appeal, citing the applicability of Rule 6(3) to the case.

Ultimately, the Tribunal found no fault in the order in appeal and upheld the decision, resulting in the rejection of the appellant's appeal. The judgment highlights the importance of maintaining separate accounts for dutiable and exempted goods to comply with relevant rules and avoid liability under the Cenvat Credit Rules.