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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 ..... s 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 of the view that since the amount @ 5%/10% of sale value of exempted final products being paid by the appellant in terms of the provisions of Rule 6(3) of Cenvat Credit Rules was nothing but reversal of Cenvat Credit availed by them on the inputs used in the manufactures of the exempted final products on presumptive basis, the equal amount being recovered by the customers has to be treated as additional consideration for the goods sold and as such, the same would be part of the sale price. The Department, therefore, was of the view that the assessable value for the purpose of payment of the amount under Rule 6(3) would also include the amount of 5% / 10% of the sale price being recovered by the appellant from the customers and the appellant would be liable to pay an amount @ 5% / 10% on the extra amount of 5% / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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 this amount has been paid to the Government, that in any case, the payment of 5%/10% of the sale price under Rule 6(3) of the Cenvat Credit Rule has to be treated tax and such tax if paid to the Government, can be recovered from the customers, and such recovery of tax paid cannot be treated as additional consideration and hence as part of the sale price, that bulk of the demand raised by Show Cause Notice dtd. 12.03.2010 for the period from April '05 to Feb.'2010 is time barred, as the fact of payment of amount equal to 5%/10% of the sale price of the exempted goods to the Government and its recovery from the customers was known to the Department earlier and and was subject matter of the Show Cause Notices dtd. 19.01.2009 & 20.09.2009 issued on the same ground and hence for subsequent period, Show Cause Notice dtd . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AC 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 complied with the provisions of Rule 6(2) read with Rule 6(3) of Cenvat Credit Rules, 2004 in as much as which they have not maintained separate account and inventory of inputs meant for dutiable final products and exempted final products and have not confined the availment of Cenvat Credit only to the quantity of inputs used for manufacture of dutiable final products, they have paid an amount @ 5%/10% of the sale price of the exempted final products at the time of their clearance. There is also no dispute that the appellant have not only mentioned the amount of 5%/10% of the sale value in their invoices as "Cenvat Credit reversal", but have also recovered this amount from the customers. According to the Department the amount @ 5%/10% of the sale value of exempted goods paid by the appellant to the Government is towar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 products. In fact by virtue of retrospective amendment of Rule 6(3) of Cenvat Credit Rules, 2004 made by Section 73 of Finance Act 2010, an assessee using common Cenvat Credit availed inputs/input services in or in relation to manufacture of dutiable as well as the exempted final products has an additional option of reversing the Cenvat Credit in respect of inputs/input services in used in the manufacture of exempted final products on proportionate basis also. Thus, when an assessee has paid to the Government an amount @ 5%/10% of the sale value of the exempted goods under Rule 6(3), this payment is linked to the requirement of reversal of Cenvat Credit on the inputs/input services used in the manufacture of exempted final products. In such circumstances, if the same amount is recovered by the assessee from the customers, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 payment already stands made by the appellant to the Revenue and stands recovered by them from their customers. When said 5%/10% amount recovered by the appellants from their customers, already stands paid to the Revenue, I really fail to understand as to why same would become additional consideration and part of the assessable value. It may not be out of place to mention here that 5%/10% amount in terms of said rule is required to be paid and not reversed from the cenvat credit account inasmuch as the expression used in the said rule is "payment of amount". They payment may be made through cenvat credit account or through PLA. But the fact remains that it is payment of an amount which is equal to particular prescribed percentage of the value of the exempted goods. As such payment which already stands made to the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessable value. 14. Apart from the above fact, I find that the issue is squarely covered by the larger bench decision of the Tribunal and there are no justifiable reasons to take a different view. I also note that Hon'ble Supereme Court in the case of CCE, Meerut vs. Kisan Sahkari Chinni Mills Ltd.-2001 (132) ELT 523 (SC) has held that in the absence of a definition of taxes in the Central Excise Act, 1944, expression "tax" is to be given a broad meaning and it would cover any levy. Administrative charges required to be paid by sugar factory for molasses sold and recovered from the customer in terms of section 8(5) of the Uttar Pradesh Sheera Niyantaran Adhiniyam, 1964 being compulsory extraction made under enactment was held to be a duty on impost in the nature of a tax, covered by section 4(4 )( d)(ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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