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TMI Blog2013 (8) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... . Limitation - Extended period – Held that:- Module as well as plastic card in majority of the cases the plastic card are inputs for the manufacture of recorded as well as unrecorded smart cards. Therefore allegation of suppression or mis-declaration of inputs is not sustainable in respect of modules and majority of the plastic cards against the appellant - Also not be liable to any penalty under Section 11AC of the Central Excise Act. Plastic cards which are exclusively going to be used in the manufacture of recorded smart cards, on such quantity of the plastic cards no Cenvat credit is admissible to the appellants as these were not the common inputs for dutiable as well as exempted goods and on such inputs demand is required to be confirmed against the appellants along with interest and equal amount of penalty imposable under Section 11AC of the Act. - E/3009/2010 - 55939/2013-EX(PB) - Dated:- 4-4-2013 - Archana Wadhwa And Sahab Singh, JJ. For the Appellant : Shri R Murlidharan, CA. For the Respondent : Ms Ranjana Jha, Jt. CDR. Per: Sahab Singh: This is an appeal filed by M/s Oberthur Card System Pvt. Ltd. (hereinafter referred to as appellant) against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted/procured locally is used to first manufacture the unrecorded smart cards. Thereafter, these unrecorded smart cards undergo the personalisation process subsequent to which the recorded smart cards come into existence. He further submits that since the inputs used for dutiable as well as the exempted goods are common, the appellants have opted for not maintaining the separate accounts and were paying amount @ 10% of the value of the exempted goods cleared from the factory. He submits that with effect from 1st April 2008 an additional option was incorporated under Rule 6(3) for proportionate reversal of the credit attributable to input and input services utilised in the manufacture of exempted goods. He submits that there is no provision under Rule 6 prescribing any minimum limit of dutiable production by the assessee. He further points out that the appellant is eligible for availing the Cenvat credit on the inputs as they are paying 10% of the price of exempted goods under the provisions of Cenvat Credit Rules. In respect of the exports made by them, they are eligible for Cenvat credit even for exempted goods under Rule 6 (6)(V) of Cenvat Credit Rules. He also submits that Show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is relying on the Statement of Shri Naveen Verma, Finance Manager and Vikas Kumar Sharma, Tax Officer of the appellants. On the other hand, it is the contention of the appellants that prior to 19.7.2007 both the goods recorded/unrecorded smart cards were dutiable and they were paying duty and availing the Cenvat credit on the plastic card and module. After the recorded smart cards were exempted they continued to avail the Cenvat credit of duty paid on inputs as they were manufacturing both dutiable as well as exempted finished goods. It is also the contention of the appellants that at the time of receipt of the input at the factory it is not possible for them to know which duty paid input would be used in manufacture of dutiable finished goods and which duty paid inputs would be used to manufacture exempted goods. There are common input, for recorded smart card as well as unrecorded smart cards. As regards the plastic card it is admitted by the appellants that sometimes they know that said plastic body would be used for recorded smart card as in those cases it bore the printed matter i.e. name, design, logo of the customer/buyers for which such recorded cards are being manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Shri Naveen Verma, Finance Manager of the appellant we find that he has stated that chips/modules are common inputs for both dutiable and exempted finished goods but the other major input that is plastic card are exclusively user based inputs and they cannot be used interchangeable for exempted as well as dutiable final products. We observe that there is no doubt about the module being a common input for the purpose of manufacture of dutiable as well as exempted goods as Shri Naveen Sharma has nowhere stated that this input is solely for exempted goods and the Commissioner's finding relying on this statement holding that module is not a common input is not sustainable. As regards the other input i.e. plastic card it is an admitted position by the appellant that in some cases they know that the said plastic body would be used for recorded smart cards as in those cases it bore the printed matter i.e. name, design, logo of the customer and buyer for which such cards are being manufactured. We find in respect of those plastic card on which name, design, logo of the customers are printed those plastic cards cannot be treated as a common input for both dutiable as well as exempte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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