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TMI Blog2013 (10) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... Jt. CDR PER : Rakesh Kumar The facts giving rise to these appeals are, in brief, as under:- 1.1. The appellant are a Central Government Public Sector Undertaking. They are manufacturers of mechanical, electrical electronic equipments falling under chapter 8485,86,87 90 of the Central Excise Tariff. The period of dispute of these appeals is from April '05 to Aug.' 2011 when the Appellant company, using Cenvat Credit availed inputs, manufactured and cleared dutiable as well as fully exempted final products. Since they were not maintaining separate account and inventory of the inputs meant to be used for dutiable and exempted final products and confining the Cenvat Credit availment only in respect of inputs meant for manufacture of dutiable final products, the appellant in accordance with the provisions of Rule 6(3) of the Cenvat Credit Rules 2004 were paying amount equal to 5%/10% of the sale value of the exempted final products at the time of their clearances. However, in the invoices to the customers, the amounts of 5%/10% of the sale price were being mentioned as " Cenvat Credit reversal", and there amounts were being recovered from this customers. The Department was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order of the Commissioner, these three appeals have been filed. 2. Heard both the sides. 3. Sh. Z.U.Alvi, Advocate, the ld. counsel of the appellant, pleaded that the appellant's case is covered by the Larger Bench judgment of the Tribunal in the case of Unison Metals Ltd. Vs. Commissioner of Central Excise, reported in 2006 (204) ELT 323 (Tri-LB) wherein it was held that the provisions of Section 11D of are not applicable in respect of amount @ 8% of the sale value paid by the assessee under Rule 57CC of the Central Excise Rules, 1944 which had also been recovered from the buyers as the amount recovered from the buyers was not retained by the appellant, that in this case there is no dispute that the amount @ 5% /10% of sale price had been paid by the appellant under Rule 6(3) in respect of clearance of exempted goods and if this account was recovered by them from the customers, it cannot be said that the appellant have retained the amount and thereby receiving an additional consideration, that collection of 5%/10% of the sale value in respect of exempted goods cannot be said to be additional consideration resulting in increase in the sale price, as there is no dispute that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of Unison Metals Ltd. (Supra) cited by the ld. counsel of the appellant and the Board's Circular No.870/8/2008 dtd. 16.05.2008 based on the same, is not applicable to the point of dispute in this case, that the amount @ 5%/10% of the sale value collected by the appellant from the customers is an additional consideration which have to be treated as part of the price and hence on this amount as also the appellant would be required to pay an amount @ 5%/10%, that duty demand therefore, have been correctly confirmed, that longer limitation period in respect of Show Cause Notice dtd. 12.03.2010 has been correctly invoked as the appellant have suppressed the relevant facts from the Department and that for the same reason the penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC have also been correctly imposed. She, therefore, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions from both the sides and perused the record. The undisputed facts are that the appellant manufacture dutiable final products as well as fully exempted final products using common Cenvat Credit availed inputs and they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Government, the same would be recoverable under Section 11D. The Larger Bench in this case has held that the provisions of Section 11D are not applicable to such a case. In our view this judgment is not applicable to the issue involved in this case, as the issue involved in the case is as to whether, the amount of 5%/10% of the sale price of exempted goods being collected by the appellant from the customers, is part of the sale price or not on which the amount under Rule (3) is to be paid. 7. In our view the amount payable under Rule 6(3) of the Cenvat Credit Rules, 2004 in respect of clearances of the exempted final products is nothing but reversal on presumptive basis of Cenvat Credit in respect of Cenvat Credit availed inputs/input services used in the manufacture of exempted final product. In this case, the assessee has paid the amount under Rule 6(3) @ 5%/10% of the sale value of the exempted final product, in lieu of not reversing the Cenvat Credit already availed in respect of cenvated inputs used in or in relation to manufacture of exempted final product as they are not eligible for Cenvat Credit in respect of input used in the manufacture of exempted final product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appeal stand disposed of as above. PER : Archana Wadhwa 10. Having gone through the order passed by the learned brother, Shri Rakesh Kumar, Member (T), I record a separate order as I do not find myself in agreement with the same. The facts of the case stand elaborately discussed by my learned brother and the same are not being repeated. The short issue required to be decided is as to whether amount of 5%/10% which the appellants have shown in the invoices as " cenvat credit reversal" and as collected from their customers, they are required to be treated as part of the assessable value and required to be added in the assessable value or not. Admittedly, such payment of 5%/10% by the appellant is in terms of provisions of Rule 6(3) of Cenvat Credit Rules which requires a manufacturer, who is not maintaining separate account for the credit availed on the inputs, to follow any of the option given in the said rule. Rule 6(3) (i) provides following option: (i) pay an amount equal to 6% of the value of the exempted goods and exempted services. It is in terms of this sub-rule that the appellant have paid an amount of 5%/10% of the value of exempted goods. Admittedly such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided earlier. The value is to be determined as per section 4 or 4A of the Central Excise Act, 1944 read with rules made thereunder. 4. In the light of what is sated above, it is clarified that as long as the amount of 8% or 10% is paid to the Government in terms of erstwhile rule 57CC of, the Central Excise Rules, 1944 or rule 6 of the CENVAT Credit Rules, the provisions of section 11D shall not apply even if the amount is recovered from the buyers. However, it may be noted that the CENVAT credit of the said amount of 8% or 10% cannot be taken by the buyer since such payment is not a payment of duty in terms of rule 3(1) of the CENVAT Credit Rules, 2004. Therefore, the said 10% amount should be shown in the invoice as "10% amount paid under Rule 6 of the CENVAT Credit Rules, 2004". 13. As is seen from the above, it stands clarified that as long as the amount 8% or 10% is paid to the Government in terms of Rule 57CC of the erstwhile of Central Excise or Rule 6 of the Cenvat Credit Rules, the provisions of section 11D shall not apply even if the amount is recovered from the buyers. If that be so, the said amount recovered from the buyer can also not be added to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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