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TMI Blog2014 (3) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... are by-products which should not be considered as final products for purposes of Rule 6 of the CCR 2004. On the other hand, in an endeavour to offset the demand raised in the show-cause notice, they reversed proportionate CENVAT credit on input services used in, or in relation to, the manufacture of the said commodities and also paid interest thereon. They did so to claim the benefit of the decision in Chandrapur Magnetic Wires (1995 (12) TMI 72 - SUPREME COURT OF INDIA). This action of the assessee tacitly amounted to acknowledgement of the fact that the said commodities were exempted final products - However, the above conduct of the assessee (reversal of proportionate CENVAT credit) is certainly inconsistent with their present stand bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, or in relation to, the manufacture of dutiable final product (oleoresin) and the exempted final products, the appellant ought to have paid 10%/5% of the sale value of the so-called exempted goods. It is this demand which stands quantified at over Rs. 3 crores for the aforesaid period. 2. The case of the appellant is that chilly seeds, seed oil and spent chilly are only by-products and not final products to attract the provisions of Rule 6 (3) of the CENVAT Credit Rules. 3. The learned counsel for the appellant submits that the proportionate CENVAT credit (credit taken on the various input services which were used in, or in relation to, the manufacture of chilly seeds, seed oil and spent chilly) was reversed and interest paid thereon an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner Vs. Nicholas Piramal (India) Ltd. [2009 (244) E.L.T. 321 (Bom.)] wherein the Supreme Court's decision in Chandrapur Magnetic Wires case (supra) was distinguished by the Bombay High Court. The learned Additional Commissioner points out that the very reversal of CENVAT credit on input services on a proportionate basis by the assessee amounts to acknowledgement of the fact that the so-called by-products were treated by them as 'exempted final products'. It is further submitted that, in August 2011, the appellant started exercising the option of proportionate reversal of CENVAT credit under sub-rule 3(A) of Rule 6 of the CCR 2004 treating the above products as 'exempted goods'. 6. In his rejoinder, the learned counsel submits that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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