2017 (10) TMI 495 - AT - Central Excise

N/N. 6/2000 dated 1.3.2000 - Demand of 8% of the value of goods cleared duty free - non-maintenance of separate set of books - Held that - it is evident from the report given by Range Supdt. that the appellant has not availed any Cenvat credit on inputs used in manufacture of paper board which has been cleared by availing exemption under N/N. 6/2000 dated 1.3.2000 - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of 8% value of goods cleared duty-free under Notification No.6/2000 dated 1.3.2000 without maintaining separate account of inputs for dutiable and exempted goods.

Analysis:
The appellant appealed against an order confirming a demand for 8% of the value of goods cleared duty-free without maintaining separate accounts for inputs used in dutiable and exempted goods. The Revenue contended that the appellant's failure to maintain separate accounts necessitated the payment under Rule 57CC of Central Excise Rules, 1944. A Show Cause Notice was issued, leading to confirmation of the demand, interest, and penalty. The matter was remanded to the Commissioner for fresh adjudication, where the demand was upheld. The appellant contended that a Range Supdt.'s report confirmed separate accounts for inputs, negating the demand's validity.

The appellant argued that a Range Supdt.'s report confirmed the maintenance of separate accounts for inputs used in dutiable and exempted goods, with no Cenvat credit taken for exempted goods. The appellant's position was that the demand was unsustainable based on this verification. The Revenue, however, supported the findings of the impugned order, leading to a hearing where both sides presented their arguments.

The Range Supdt.'s report, dated 26.4.2001, confirmed the appellant's separate inventory and accounts for inputs, stating no Cenvat credit was used for exempted goods. The report recommended accepting the exemption for the goods cleared under Notification No.6/2000 dated 1.3.2000. Despite the appellant's failure to produce the inventory and accounts to the Range Supdt., the report was not disregarded at any stage. Consequently, the Tribunal found that the appellant had not availed Cenvat credit on inputs for the exempted goods, rendering the impugned order baseless and leading to the appeal's allowance.

In conclusion, the Tribunal set aside the impugned order as the appellant's separate accounts for inputs were confirmed by the Range Supdt.'s report, demonstrating no Cenvat credit usage for exempted goods. The appeal was allowed based on the lack of merit in the demand for 8% of the value of goods cleared duty-free under Notification No.6/2000 dated 1.3.2000.