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TMI Blog2016 (6) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise department and were clearing their final product on payment of duty after availing the benefit of Cenvat Credit of duty paid on inputs. 2. However, as the appellant was doing galvanization on H B wire procured from other manufacturers and inasmuch as the galvanization process does not amount to manufacture, they were neither availing any cenvat credit of duty paid on the inputs nor were discharging any duty liability on the final product and the Cenvat Credit account was being maintained separately for different types of inputs. 3. With effect from 1999-2002, the appellants started availing cenvat credit on the entire common inputs used in the manufacture of dutiable products as also the products which did not attract duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess not amounting to manufacture. Similarly, it is accepted position by both the sides that process of galvanization does not amount to manufacture thus calling for non payment of duty of excise on the said process. 6. The question is as to whether in such a scenario, the appellant can avail the cenvat credit of duty on the inputs used in the manufacture of such products and can clear such products on payment of 8% of value of said products in terms of provisions of Rule 6(3)(b). It cannot be out of place to mention here that the said goods stand mentioned in the Central Excise Tariff attracting 16% duty on ad valoram basis. The appellants contention is that though the process adopted by them has been held to be non-manufacture, the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as there was no manufacturing activity involved and thus reason that he is not paying full rate of duty of 16% on the said goods at the time of clearance of the same and on the other, he is claiming the applicability of Rule 6(3)(b) on the ground that said goods are dutiable but exempted. Such an interpretation if adopted would lead to total chaos. Even at the cost of repetition, it may be observed that appellant has not cleared their final product on full payment of duty of 16% in which case credit could have been allowed to them, as per settled proposition of law. 8. Having held that Rule 6(3)(b) is applicable only in respect of exempted products, we proceed to decide as to what are the exempted goods. The answer lies in the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of said product, they have also reversed the amount of Rs. 65 lakh approximately and the benefit of the same should be extended. We agree with the appellant that while denying the total credit availed by the assessee, whatever stand utilized by them by reversing such credit at the time of clearance of the goods, payable duty demand has to be neutralized against the same. 12. We are also of the view that appellant is following said procedure after duly intimating the Revenue and seeking their permission, there is no scope for imposition of penalty upon them. We accordingly, set aside the penalty and remand the matter to the original authority for verification of the appellants claim of reversal of Cenvat credit at the time of clearance of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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