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TMI Blog2015 (6) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... final products and the respondent have availed cenvat credit in respect of input/input services used in the manufacture of these dutiable final products. In course of manufacture of these dutiable final products, some by-products exempt from duty also arose. Acid oil emerges in the manufacture of refined vegetable oil and during the manufacture of Dextrose Monohydrate and Dextrose Anhydrous, a by-product viz. hydrol emerges. In these circumstances of the case, it was impossible for the Respondents to maintain separate account and inventory of the inputs/input services meant for dutiable final products and exempted final products as this can be done only if two different final products, one dutiable and the other exempted are being manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and dutiable final products, while they had availed cenvat credit in respect of those input/input services. It is on this basis that the demands of the amounts of ₹ 2,48,733/-and Rs . 1,59,704/-were confirmed against the respondent under Rule 6(3)(b) of the Cenvat Credit Rules, 2002/2004 by two separate orders passed by the Asst. Commissioner along with interest thereon under Section 11AC and equal amount of penalty were imposed. The orders of the Asstt . Commissioner were set aside by the Commissioner (Appeals) by a common order-in-appeal against which these appeals have been filed by the Revenue. 3. In case of Appeal No.E /723/2007-Excise the respondent were manufacturing Dextrose Monohydrate and Dextrose Anhydrous, which att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able final products/exempted final products, have not maintained account/inventory and have not confined the cenvat credit availment only to the input/input services meant for dutiable final products, the provisions of Rule 6(3)(b) would be attracted and hence, the impugned orders upholding the dropping of the demands under Rule 6(3)(b) are not correct. 6. Ms. Surabhi Sinha , Advocate ld. Counsel representing M/s, Goyal Proteins Ltd. and Shri A.C . Jain. Advocate, ld. Counsel representing Sukhjit Starch Chemicals Ltd. pleaded that in these cases, the exempted by-products viz. acid oil in course of manufacture of refined vegetable oil and Hydrol in the course of manufacture of Dextrose Monohydrate and Dextrose Anhydrous had emerged as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iz. hydrol emerges. In these circumstances of the case, it was impossible for the Respondents to maintain separate account and inventory of the inputs/input services meant for dutiable final products and exempted final products as this can be done only if two different final products, one dutiable and the other exempted are being manufactured consciously. When compliance of a provision is impossible, an assessee cannot be penalized for his failure to comply with the same. Lex non cogit ad impossibilia is a well settled legal principle. It is for this reason only that the Hon'ble Bombay High Court in the case of Rallis India Ltd. (supra) and the Tribunal in the case of Narmada Gelatin (supra) had held that the provisions of Rule 6(2) rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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