9911796707
TMI Blog2011 (5) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... % of value of the final exempted goods in terms of the provisions of Rule 6(3)(b) of Cenvat Credit Rules - As this amount payable at the time of clearances of the exempted final products is primarily intended to counter-effect the credit availed on the inputs used in the manufacture of such final exempted products. As such, the intent being to neutralize the credit so availed, the explanation provides for payment from the cenvat credit account itself. As such, in views to apply the provisions of Rule 8 (3A), requiring the assessee to pay duty out of PLA during the period of default would not apply to the provisions of Rule 6 (3)(b) payments - as appellants are regularly making payments from PLA, if the demand in question is held to be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct at the time of clearances of the same by not utilizing the cenvat credit but in cash. 2. Apart from the dutiable goods the appellants were also manufacturing the other products which were being cleared by them under exemption Notification No. 64/95-CE dated 16.3.1995, 10/97-CE dated 01.3.1997 and 6/2006-CE dated 01.3.2006. Inasmuch as they were availing the cenvat credit of duty on the common inputs utilized in the manufacture of dutiable as also exempted final products, they were required to pay 10% of the value of exempted final products, in terms of the provisions of Rule 6(3)(b) of Cenvat Credit Rules, 2002. The appellant paid the said amount of 10% by debiting the same in their cenvat credit account. In addition, some of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Rules, 2002. As such it stands held by the lower authorities that consequently, in case of default in payment of duty, restriction of utilization of cenvat credit for payment of duty on final products imposed under sub-Rule 3(A) of Rule 8 will also be applicable to payment of duty under Rule 6 (3) (b) of Cenvat Credit Rules, 2004. 5. On the other hand, it is the appellant s contention that cenvat credit availed by the appellant can be utilized in terms of the provisions of Rule 3 (4) for payment of duty of excise on final products or an amount equal to cenvat credit taken on inputs or capital goods, if such inputs or capital goods are removed as such or an amount under sub Rule 2 of Rule 16 of Central Excise Rules, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such, they contended that no demand is sustainable. 6. After carefully considering the submissions made by both the sides, I find that the dispute lies in very narrow compass. Admittedly, the appellants have followed the provisions of Rule 8 for discharging their duty liability on consignment basis and out of PLA, during the period of dispute on account of default for payment of duty in the month of March 2007. The appellants were required to pay 10% of value of the final exempted goods in terms of the provisions of Rule 6(3)(b) of Cenvat Credit Rules. The said Rule very clearly states that the manufacturer shall pay an amount equal to 10% of the total price of the exempted final products, charged by the manufacturer for the sale of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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