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TMI Blog2012 (12) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been used in the manufacture of dutiable final products as well as waste - appellant on the other hand, deny having used any such duty paid dies or chemicals and having availed Cenvat credit - matter remanded for de novo adjudication - E/2451/2011 - A/521/2012-EX(BR)(PB) - Dated:- 4-4-2012 - Justice Ajit Bharihoke, Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri Balbir Singh, Advocate, for the Appellant. Shri Nagesh Pathak, AR, for the Respondent. [Order per : Rakesh Kumar, Member (T)]. The facts leading to this appeal and stay application are, in brief, as under :- 1.1 The appellants are manufacturers of cotton/polyester blended yarn, cotton yarn and polyester yarn chargeable to central excise duty. They also avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacture of dutiable final product (yarn) and exempted final product (waste) and since they have not maintained separate accounts and inventory in respect of the inputs and input services used in the manufacture of exempted final product and dutiable final products, the provisions of Rule 6(3) would be attracted and, therefore, in respect of the clearances of the waste, they would be liable to pay an amount equal to 10%/8% of the sale value. It is on this basis that show cause notice dated 6-5-2010 was issued to the appellant for - (a) Recovery of an amount of Rs. 4,54,84,476/- in respect of clearances of waste during 2005-2010 period which is payable in terms of the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 17/LDH dated 14-7-2011 confirmed the entire demand of Rs. 4,54,84,476/- against the appellant under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A(1) of the Central Excise Rules along with interest on it at the applicable rate under Section 11AB of Central Excise Act and besides this, imposed penalty of equal amount on the appellant under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Act. Against this order of the Commissioner, this appeal along with stay application has been filed. 2. This matter was initially heard on 15-3-2012 and thereafter on 4-4-2012. Though on these dates the matter has been listed for hearing of stay application only, after hearing the matter, the Bench was of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterials, that the entire fibre/yarn waste on which an amount of Rs. 4,54,84,476/- has been demanded under Rule 6(3) of Cenvat Credit Rules, is generated from the fibre in course of manufacture of yarn, while there was no dispute that no Cenvat credit has been availed in respect of fibre, that in view of this, the provisions of Rule 6(2) are not applicable and no amount at the rates prescribed under Rule 6(3) can be demanded on the clearances of fibre/yarn waste, that the Commissioner s findings that the dyes and chemicals had been used in the manufacture of spun yarn is factually incorrect, as the appellant have not availed any Cenvat credit in respect of the dyes and chemicals, that even in the show cause notice there is no such allegatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for procuring export orders and GTA services of transportation from factory to port have been used in respect of the consignments cleared for export and thus, as such, in respect of yarn/fibre waste, there is no possibility of any common input services like GTA services or Business Auxiliary Services or common inputs like packing materials having been used. However, according to the department, the appellant had also availed Cenvat credit in respect of the dyes and chemicals, which have been used in the manufacture of dutiable final products as well as waste. The appellant on the other hand, deny having used any such duty paid dies or chemicals and having availed Cenvat credit. If Cenvat credit in respect of dyes and chemicals, if any u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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