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TMI Blog2011 (5) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... enue implications. - The appeal is allowed - E/2437/2006 - - - Dated:- 4-5-2011 - Mrs. Archana Wadhwa, Dr. P. Babu, JJ. Shri Jigar Shah, Adv. for the Assessee; Shri R.S. Sangia, SDR for the Revenue. Per: Mrs. Archana Wadhwa: The appellants are engaged in the manufacture of Spirally Welded Steel Pipes and are located in Kach area and were availing the benefit of Notification No.39/2001-CE, dt.31.7.01. In terms of said notification, the appellants are required to pay duty on their final product by reversing the CENVAT Credit. After exhausting CENVAT Credit, the duty is required to be paid on their final clearances out of PLA. Such duty paid by the assessee out of PLA is required to be refunded to them subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal as also of Hon'ble High Courts/Hon'ble Supreme Court. As such, it is seen that the appellants reversed the amount of interest of Rs.76,50,171/- (Rupees Seventy Six Lakhs, Fifty Thousands, One Hundred and Seventy One only) being the amount equivalent to CENVAT availed on the quantity of raw material actually used in the manufacture of such goods. 3. As experience shows that the duty @ 8% of the price of the exempted goods is mostly higher than the CENVAT Credit amount involved on the input used in the manufacture of such goods. As such, the Revenue usually takes a stand that the assessee should pay an amount of 8% of the value of exempted goods. It is also seen that the assessee, usually takes a stand that instead of paying 8% of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the Revenue is that if such excess credit would have been lying in their MODVAT Credit account, the assessee would have used the same for payment of duty on their final product. Instead, they paid duty on their final product through their PLA and such duty paid out of PLA stand refunded to them in terms of Notification No.39/2001-CE, dt.31.7.01. As such, it was entertained that the appellants have been given excess refund of Rs.28,27,768/- (Rupees Twenty Eight Lakhs, Twenty Seven Thousands, Seven Hundreds and Sixty Eight only). Accordingly, proceedings were initiated against them by way of issuance of Show Cause Notice on the following grounds. 6. Whereas, as per the provisions of Notification No.39/2001-CE, dt.31.7.01 as am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lakhs, Twenty Seven Thousands, Seven Hundreds and Sixty Eight only), which they deposited in PLA and utilized for payment of duty on their final product. As such, the entire exercise is revenue neutral. They, accordingly, requested for dropping the proceedings. 7. The above contentions were not favoured with by original adjudicating authority, who confirmed the demand along with interest. However, he allowed the appellants to take re-credit of equal amount in their RG23A Part II. The said order was confirmed by Commissioner(Appeals). Hence, the present appeal. 8. Ld.Advocate appearing before us has reiterated the same very grounds which were raised before the lower authorities. On the other hand, the learned SDR appearing for the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cases of common use of inputs for dutiable exempted final product, reversal of credit relatable to the inputs used in manufacture of exempted final product is sufficient and no demand under Rule 6 of CENVAT Credit Rules, 2002 is required to be upheld. The appellants have admittedly reversed the credit attributable to the inputs used in the manufacture of final exempted product. The said reversal is in accordance with the provisions of Rule 6 read with the Hon'ble Gujarat High Court s judgment referred supra. There is no de-barring in Rule 6, Z laying down that in cases of the exemption of the nature as contained in the provisions of Notification No.39/2001, the said reversal would not be applicable. As such, we do not find any justificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f PLA, cannot be upheld inasmuch as the entire exercise is revenue neutral and involving no revenue implications. The appellant s reliance on Hon'ble Supreme Court decision in the case of CCE Ahmedabad Vs. M/s Narayan Polyplast as reported in 2005 (179) ELT 20 (SC) as also in the case of CCE Vadodara Vs. M/s Narmada Chematur Pharmaceuticals as reported in 2005 (179) ELT 276 (SC), dealing with the aspect of revenue neutrality is appropriate. 12. We may here also deal with the ld.SDR s contention that after Kach notification is no more applicable, the appellants have started clearing their exempted product by debiting 5% of the value of the exempted goods from CENVAT Credit account. According to us, the above pattern of discharging duty b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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