9911796707
TMI Blog2012 (12) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... ish that the appellant used cenvatable inputs for production of bagasse. Once it is concluded that the department has failed to establish that the appellant used cenvatable inputs for manufacture of bagasse, Rule 6(2) and Rule 6(3) (i) & (ii) of Cenvat Credit Rules, 2004 are not attracted - duty demand, interest and penalty set aside - E/88/2012 - A/601/2012-EX(BR)(PB) - Dated:- 9-5-2012 - Justice Ajit Bharihoke, Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri S.S. Dabas, Advocate, for the Appellant. Shri I. Beg, AR, for the Respondent. [Order per : Justice Ajit Bharihoke (President)]. The appellants are engaged in the manufacture of V.P. Sugar, molasses, rectified spirit and de-natured spirit falling under Chapter sub-he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed this appeal along with stay application. 3. Though today this matter is listed for hearing of stay application only, after hearing the matter for some time, we were of the view that since only a short issue is involved and the appeal itself can be disposed of finally, the requirement of pre-deposit is waived and with the consent of both the sides, the matter was heard for final disposal. 4. Ld. Counsel for the appellant has submitted that the impugned order as also the order-in-original suffers from infirmity as the order is based on incorrect appreciation of facts and wrong application of Rule 6 of the Cenvat Credit Rules, 2004. It is submitted that the Adjudicating Authority as also the Appellate Authority have failed to appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty have been rightly imposed on the appellant. 6. We have carefully considered the rival contentions and perused the record. 7. The demand against the appellant has been confirmed with the aid of Rule 6(3)(i) 6(3)(ii) on the basis of 10% of transaction value of bagasse cleared by the manufacturer. Thus, for the purpose of this appeal, we are mainly concerned with Rule 6(1), Rule 6(2) and Rules 6(3)(i) and 6(3)(ii) of Cenvat Credit Rules, 2004 which are reproduced thus : 6. Obligation of a manufacturer or producer of final products and a provider of taxable service. (1) The CENVAT credit shall not be allowed on such quantity of inputs used in or in relation to the manufacture of exempted goods or for provision of exempted ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce upto the place of removal; (iii) for the provision of exempted services; and (iv) for the provision of output services excluding exempted services, and shall take CENVAT credit only on inputs under sub-clauses (ii) and (iv) of clause (a) and input services under sub-clauses (ii) and (iv) of clause (b)]. (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow [any one] of the following options, as applicable to him, namely : (i) pay an amount equal to six per cent of value of the exempted goods and exempted services; or (ii) pay an amount as determined under sub-rule (3A) or (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for production of bagasse. Once it is concluded that the department has failed to establish that the appellant used cenvatable inputs for manufacture of bagasse, Rule 6(2) and Rule 6(3) (i) (ii) of Cenvat Credit Rules, 2004 are not attracted. As such, we are of the view that the adjudicating authority as well as appellate authority have fallen in error to base their finding on the aforesaid rules. 9. In view of the above, we are unable to sustain the impugned order confirming the duty demand, interest and penalty imposed on the appellant. Appeal is therefore accepted and the impugned order as well as order-in-original are set aside. 10. The appeal as well as stay petition is disposed of in the above terms. - - TaxTMI - TMITax - Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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