9911796707
TMI Blog2013 (12) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... od of dispute, they were manufacturing branded goods i.e. the goods bearing the brand name of other person in respect of which they were paying duty and availing Cenvat credit. 1.2 On scrutiny of ER-3 returns filed by the appellant it was found that while their Cenvat credit balance as on 31/3/07 was nil, as at that time they had reversed the entire Cenvat credit in respect of inputs including the inputs meant for manufacture of branded goods as per the provisions of Rule 11 (2) of Cenvat Credit Rules, the Cenvat credit account as on 1/4/07 showed the opening balance of Cenvat credit of Rs. 3,21,569/-. The department was of the view that once the appellant have reversed this credit on 31/3/07, they cannot take the credit of this amount aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands of Rs. 3,21,564/-, Rs. 59,112/- and Rs. 5,167/- alongwith interest and imposed equal amount of penalty on the appellant under Section 11AC. On appeal being filed to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 16/7/10 upheld the above order in toto. Against this order of the Commissioner (Appeals), this appeal has been filed. 2. Heard both the sides. 3. Shri Nand Kishore Shahi and Shri Rakesh Kumar Shahi, Advocates, the learned Counsels for the appellant, pleaded that so far as Cenvat credit demand of Rs. 3,21,564/- is concerned, this credit had been taken in respect of inputs meant for being used in the manufacture of branded goods, to be cleared on payment of duty, that since the very beginning, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant were not maintaining separate account and inventory of the inputs meant for branded and unbranded goods is incorrect, that the branded goods being outside the purview of SSI exemption, as the clearances of branded goods are neither counted for determination the value of exemption during the financial year not for calculating the aggregate value of clearances of all excisable goods during previous financial year, the prohibition in para 2 (iii) of SSI Exemption Notification regarding non-availment of Cenvat credit while availing SSI exemption, is applicable only in respect of the goods which are being cleared by availing the SSI exemption and is not applicable in respect of branded goods, which are not covered by the SSI exemption a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted by the Range Officer, were not maintaining separate account and inventory of the inputs meant for branded and unbranded goods, that while availing SSI exemptions, the appellant could not avail Cenvat credit even in respect of branded goods, that the proviso to para 2 (iii) of the notification providing that nothing in this clause shall apply to inputs used in the manufacture of branded goods had been introduced only w.e.f. 11/2/09 and the same was not there during the period of dispute, that in view of this, the Cenvat credit demand of Rs. 3,21,564/- has been correctly upheld, that as regards duty demand of Rs. 59,112/-, this demand is in respect of the 15.7 M.T. of finished products cleared in 2007 without payment of duty, that the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. Moreover para 4 of the SSI exemption under Notification No.8/2003-CE says that the exemption contained in this notification shall not apply to the specified goods bearing brand name, whether registered or not, of another person except for the exception mention in it. Admittedly, the appellant's case is not covered by the exceptions in para 4 and, as such, in respect of the branded goods being manufactured by the appellant, the provisions of the Notification No.8/2003-CE do not apply. When this is so, no clause of this exemption notification including para 2 (iii) would apply and, hence, in respect of branded goods being manufactured by the appellant, they would be eligible for Cenvat credit. According to the appellant, they were main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which duty had been paid. Thus, the duty demand of Rs. 59,112/- and penalty of this count is upheld. 8. As regards credit entry of Rs. 5,167/- in the PLA, there is no dispute that this has been reversed. However, since, out of this credit only an amount of Rs. 1,286/- have been used for payment of duty, only the penalty of Rs. 1,186/- under Section 11AC can be upheld and, as such, penalty of Rs. 5,167/- is not sustainable. 9. In view of the above discussion, the duty demand of Rs. 59,112/- alongwith interest and penalty of equal amount is upheld and duty demand of Rs. 1,286/- alongwith penalty of equal amount is also upheld but the penalty of Rs. 5,167/- is set aside. As regards the Cenvat credit demand of Rs. 3,21,564/- alongwith inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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