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TMI Blog2009 (10) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... envat Credit Rules 2004. The impugned order also demanded applicable interest on the above amount under Section 11AB of the Act read with Rule 12/14 of Cenvat Credit Rules 2002/2004. Equal amount of penalty as the amount demanded has been imposed on the appellants under Section 11AC of the Act read with the relevant Cenvat Credit Rules and Section 78 of the Finance Act 1994. The Commissioner found that the appellants engaged in the manufacture of dutiable aerated water, Limca and Sprite and exempted fruit pulp based drink Maaza, had taken and utilized cenvat credit on common inputs and input services during the period 4/03 to 12/07 without maintaining separate accounts for receipt, consumption and inventory of inputs and input services. As the assessee had not maintained separate accounts for receipt, consumption and inventory of inputs and input services meant for use in the manufacture of dutiable final products Limca and Sprite and exempted Maaza, it was required to pay duty at the rate of 10% of the sale price of Maaza in terms of Rule 6(3)(b) of the CCR 2004. Accordingly, the Commissioner demanded an amount of Rs. 4,73,73,135/- along with applicable interest and imposed equal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim that no amount stipulated under Rule 6(3)(b) of CCR was required to be reversed by them when they had reversed cenvst credit relatable to inputs and input services that had gone into the manufacture of exempted final products they relied on the following decisions of the Tribunal. (1) CCE Visakhapatnam v. Deccan Sugars [2006 (199) E.L.T. 529 (Tri. - Bang.) = 2007 (6) S.T.R. 207 (Tri.-Bang.)] (2) ETA Technology Ltd. v. CCE, Bangalore [2007 (212) E.L.T. 371 (Tri. -Bang.) = 2007 (6) S.T.R. 207 (Tri. - Bang.)] (3) Ruchi Soya Industries Ltd. v. CCE [2007 (82) RLT 624] (4) GMR Technologies Industries Ltd. v. CCE, Visak [2008 (223) E.L.T. 246] It is submitted that the adjudicating authority had ignored the ratio of these decisions and therefore, the impugned order was bad in law. It is also submitted that the Hon'ble High Court of Gujarat had approved the order of the Tribunal to the effect that reversal of Cenvat credit on common inputs was adequate Compliance of Rule 6 vide its decision in the case of CCE v. Maize Products - 2009 (234) E.L.T. 431 (Guj.) = 2008-TIOL-596-HC-AHM-CX. Following decision/judgements are relied on in support of the claim that when the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer for the sale of such goods at the time of their clearance from the factory" Rule 6 of CCR 2004 incorporates similar procedure as regards also input services used in relation to manufacture of dutiable and exempted goods. 5.2 In the instant case, the appellants received water treatment chemicals and input services and used the same in relation to manufacture of dutiable Limca and Sprite and exempted Maaza during the material period without maintaining separate accounts as prescribed. The appellants reversed the cenvat credit relatable to inputs used in relation to Maaza manufactured and cleared during the material period, after such clearances. The dispute is whether the assessee has discharged its obligation under Rule 6 of CCR. The appellants have relied on the following judicial authorities in support of the claim that when the credit availed in relation to exempted final products is reversed that would be sufficient compliance with Rule 6(3)(b) of CCR:- (i) Pepsico Holdings Pvt. Ltd. v. CCE - 2008 (228) E.L.T. 452 (Tribunal) = [2008 (155) ECR 236 (T) (ii) Nicholas Piramel (I) Ltd. v. CCE [2008 (232) E.L.T. 37 (Tri. - LB)] (iii) CCE, Ahmedabad v. Maize Products [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the factory?" The ratio is not that the requirement is not met if the appropriate credit is reversed after removal of the goods from the factory. In the other two authorities relied on by the assessee, it was held that once the assessee reversed credit relatable to exempted final products, the requirement of rule 6(3) of CCR was met even if the reversal took place after removal of the goods. Undisputedly these provisions are not intended to raise revenue for the government. By implementing the provisions in the manner as ordered by the Commissioner, astronomical sums are demanded for taking credit of relatively small amounts, for instance in CCE, Mumabi-VI v. Philips India Ltd. [2006 (200) E.L.T. 106 (Tri.-Mumbai)] Rs. 1,09,21592 was demanded in the impugned order for taking inadmissible credit of Rs. 87569/-, in Ruchi Soya Industries Ltd v. CCE, Mangalore [2007 (82) RLT 624 (Cestat -Bang.)] the demand impugned was Rs. 84,95,66,016/- for taking credit of Rs. 26,59,546/- and in Sirpur Paper Mills v. CCE, Hyderabad [2006 (205) E.L.T. 188 (Tribunal) = (2005 (71) RLT 336 (CESTAT-Ban.)], the corresponding figures were Rs. 2.6 crores and Rs. 4.29 lakhs. The Tribunal vacated these de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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