9911796707
TMI Blog2014 (7) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty of 8%+2%+1% by availing benefit of Exemption Notification No.5/2006-CX dt.1.3.2006. The Notification stipulates that, in order to avail concessional rate of duty, the assessee (i) shall not avail the credit on inputs and (ii) shall not use the electricity in firing the Kiln. It was observed that, the assessee has fulfilled both of the conditions and hence eligible for the benefit of notification and the transactions are found to be in order. 3. As far as "Flat Bed Screens" are concerned, they are (i) clearing at nil rate of duty to their sister units for further use in the manufacture of excisable goods, by availing benefit of Exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the foregoing facts, the present status is that, the assessee is manufacturing and clearing, (i) Glazed Tiles on payment of concessional rate of duty at 8%+2%+I% (Notn.No.5/06 dt.1.3.2006), and (ii) Flat Bed Screens at nil rate of duty (Notn.No.30/2004 dt.9.7.2004) 8. In a nut shell, the activities of the assessee can be summarized as under; (i) Manufactures and clears Dutiable as well as Exempted goods; (ii)Does not avail credit on inputs, but avails credit on capital goods and input services; Commonly utilizes the input services for the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee shall follow the procedure stipulated under Sub-Rule 6(3) (A) of CCR 2004. 10. In the instant case, it is observed that, the assessee is availing credit on input services like (i) Man Power Recruitment services (ii) security Services (iii) Erection and Commissioning (iv) Consultant Services (v) Telephones (vi) Canteen Services etc. These services are commonly being utilized for the manufacture and clearance of dutiable as well as exempted goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own under Sub-Rule (ii) under Rule 6 of CCR 2004, has not paid any amount so far, which is to be recovered from them along with Interest. 13. Thereafter proceedings were initiated by issuing a show-cause notice on 27/05/2009 proposing to deny proportionate CENVAT credit availed in respect of exempted products on input services which resulted in confirmation of demand of Rs. 2,04,370/- towards ineligible CENVAT credit with interest and imposition of penalty of Rs. 10,000/-. 14. The learned counsel submits that the proportionate credit has been denied on the ground that the appellant has utilized the input services for dutiable as well as exempted products and in terms of provisions of Rule 6, they could not have availed the same in the abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax paid on input services in respect exempted products. 16. I have considered the submissions made by both the sides. As regards application of explanation to Rule 3(7) of CCR, I find that the rule is applicable. The rule would not have been applicable if the Notification was to provide that the exemption would be available if input service was mentioned in the notification. If there is an exemption available to a finished goods in spite of the fact that credit has been availed and if the notification specifically provides that CENVAT credit even if it is taken benefit would be available the provisions of Rule 3 may be attracted. In a case where the exemption is denied if the credit is availed and the notification nowhere mentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be demanded has to be reduced by this amount. 18. Finally, I have to consider whether extended period could have been invoked or not. The learned counsel submits that the very same issue had been under consideration of the Department and therefore the extended period could not have been invoked. However, I find that as found from the audit observation reproduced above, the earlier proceedings was relating to the issue as to whether the appellant was eligible for exemption even when credit of input service tax had been taken or not. The issue was not whether the appellant is required to reverse proportionate credit when the services are used in dutiable and exempted products. Therefore the fact that there was an earlier proceedings would ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
