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TMI Blog2007 (11) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... e commodities Ordinary Denatured Spirit and exempted commodity Rectified Spirit classifiable under Chapter sub-heading 2204.00 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant availed Cenvat credit on molasses used in the manufacture of dutiable and exempted finished goods. The appellant reversed the credit on molasses used in the manufacture of exempted final product under Rule 6(3)(a) of Cenvat Credit Rules, 2002. But the appellant did not reverse the credit on inputs used in the manufacture of exempted final product, which was lost as mentioned in ER-1 return. Show cause notice was issued proposing demand of duty on this ground. The adjudicating authority confirmed the demand of duty of Rs. 87,486/- and imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of exempted final product, under Rule 6(3) (b) of Cenvat Credit Rules. On scrutiny of the monthly return, it was noticed by the Central Excise Officers that during the period May, 2002 to December, 2002, there is persistent loss of exempted goods i.e. Rectified Spirit and the appellant had neither reversed the credit taken on input molasses nor paid any amount of duty. Therefore, it was proposed in the show cause notice that the appellant are liable to reverse back the full credit on molasses attributable to the manufacture of exempted final product, which were lost. The contention of the appellant is that the exempted final product Rectified Spirit was used in the manufacture of dutiable final product. It is further contented tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the appellants are not entitled to avail the credit on inputs used in the manufacture of exempted final product. It is seen that the appellants are reversing the credit on molasses used in the manufacture of exempted final product. Therefore, they are liable to reverse the credit on molasses on the exempted final product as lost. In the instant case, the appellants are not entitled to take credit on the inputs used in the manufacture of the exempted goods and therefore, they are liable to reverse the credit on the inputs used in the manufacture of the final product as lost. Accordingly, I do not find any merit in the appeal and the same is rejected. (Order dictated and pronounced in the open Court) - - TaxTMI - TMITax - Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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