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TMI Blog2008 (4) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... I/EB - Dated:- 3-4-2008 - JYOTI BALASUNDARAM, VICE PRESIDENT AND A.K. SRIVASTAVA, MEMBER TECHNICAL For the Petitioner : S.S. Gupta, CA For the Respondent : Hitesh Shah, SDR JUDGEMENT PER A.K. SRIVASTAVA, MEMBER TECHNICAL 1. Heard both sides and perused the records. 2. This appeal has been filed by the appellants against the Order-in-Original no. 01/SK-01/2005/Thane-I dated 31.01.2005 passed by the Commissioner of Central Excise, Thane-I, Mumbai. The Commissioner vide the impugned order, directed the appellants to pay ₹ 84,61,157/-, ₹ 1,85,23,739/-, ₹ 2,15,94,748/-, the amounts demanded in the three show cause notices under Rule 12 of Cenvat Credit Rules, 2002 read with Section 11A of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of Crude Vitamin A prior to the removal of the animal feed supplement from the factory. The Revenue's allegation is that once the credit is taken on the inputs, there is no provision in the Cenvat Credit Rules to reverse the credit and the appellants are liable to pay an amount @8% of the value of the animal feed supplement. 5. During the course of the hearing, the following Circulars issued by the Central Board of Excise and Customs relating to the subject matter were cited before us:- 1. 591/28/2001-CX dated 16.10.2001; 2. 654/45/2002-CX dated 19.8.2002; 3. 739/55/2003-CX dated 28.8.2003; 4. 858/16/2007-CX dated 8.11.2007 6. The appellants relied upon the following case laws in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the above case laws cited by the appellants and Revenue, we find that there are some more case laws on the subject, which are as follows: 1. Ruchi Soya Industries Ltd. vs. CCE, Mangalore reported in 2007 (82) RLT624 (CESTAT-Bang); 2. Commissioner of Central Excise, Mumbai VI vs. Philips India Ltd. reported in 2006 (200) ELT 106 (Tri-Mumbai); 3. Mangalore Refinery and Petrochemicals Ltd. vs. CCE, Mangalore. 4. Raja Ram Maize Products vs. CCE, Raipur reported in 2006 (206) ELT 380 (Tri-Del) While in the case laws referred to in para (a) to (c) it has been held that 8%/10% amount is not payable on the exempted final product, if the input credit taken in respect of exempted final product is reversed, in the case law re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, opting not to maintain separate accounts' shall follow either of the following conditions, as applicable to him, namely:- (a) if the exempted goods are- (i) goods falling within heading No. 22.04 of the First Schedule to the Tariff Act; (ii) Low Sulphur Heavy Stock (LSHS) falling within Chapter 27 of the said First Schedule used in the generation of electricity; (iii) Naphtha (RN) falling within Chapter 27 of the said First Schedule used in the manufacture of fertilizer; (iv) tyres of a kind used on animal drawn vehicles or handcarts and their tubes, falling within Chapter 40 of the said First Schedule; (v) newsprint, in rolls or sheets, falling within heading No. 48.01 of the said First Schedule; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble inputs for cases covered under sub-rule (3) and in respect of all other inputs sub rule (3) (b) of Rule 6 provides for payment of an amount of 8% of total price (excluding sales tax and other taxes, if any, paid on such goods) of the exempted final products charged by the manufacturer for the sale of such goods at the time of their clearances from the factory. Thus reversal of the credit taken or availed under Rule 6 is not contemplated by the Cenvat Credit Rules, 2002. The contention that it is open to the assessee to reverse the credit of duty availed in respect of the inputs instead of paying an amount of 8% of sale price in terms of the principle laid down by the Supreme Court in Chandrapur Magnet case cited supra does not appear to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of exempted goods and it does not pertain to reversal of input credit. If the conditions of sub-rule (2) of rule 6 are not followed, then the question of taking Cenvat credit and subsequently reversing it does not arise at all . The provisions of Rule 6 are unambiguous and clear. In terms of rule 6, the assessee, who has not maintained separate inventory and has taken credit on common inputs used in the manufacture of dutiable and exempted products (except in the cases mentioned in the provisions contained in sub-rule (3) (a) has no option but to reverse 8% of the price of the exempted goods as per provisions of sub rule 3 (b) of the said rule. If the appellants have consciously chosen to disregard the clear and unambiguous provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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