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TMI Blog2019 (1) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... rely covered under Rule 14 and Rule 15. The inputs are used for the purposes other than manufacture, without maintaining separate accounts for such inputs but after reversing, a proportionate amount of CENVAT Credit availed on them and this cannot be considered as removal of inputs as such. the term (factory or premises) does not appear to have been defined in this sub rule. Therefore, all that can be concluded is that if inputs on which credit has been taken or removed for other than the purposes for which credit was taken, proportionate amount of CENVAT Credit needs to be reversed. It is undisputed that the appellant in this case has done so. Under these circumstances, it is hard to say that the reversal of CENVAT Credit under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of very small quantities, is not identifiable at the time of availment of CENVAT Credit. When these inputs are used for other purposes, the appellant has been reversing the CENVAT Credit of an amount equivalent to the credit availed on such inputs. During the period January 2008 to April 2011, they had reversed an amount of ₹ 56,99,304/- being the CENVAT Credit taken on inputs removed and used for the purposes other than use in manufacture. A show cause notice was issued to the appellant demanding interest on the amount of credit so reversed. It was also alleged in the show cause notice that the appellant has wrongly taken CENVAT Credit in the first place and therefore are liable to penalty under Rule 14 of CCR 2004. It is the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in support of his contention to this effect. (a) CCE Vs. Bharat Dynamics Ltd. [2016(331)ELT 182 (A.P.) (b) CCE Vs. Strategic Engineering Pvt. Ltd. [2014(310) ELT 509 (Mad.)] (c) CCE Bangalore vs. Bill Forge Pvt. Ltd. [2012(279)ELT 209 (Kar.)] (d) B. Girijapathi Reddy Co. vs. CCE, Guntur [2016(344)ELT 923 (Tri.- Hyd.)] (e) RINL vs. CCE, Visakhapatnam I Final Order No. A/30494/2018, dated 24.04.2018. 3. Ld. Counsel also submits that the demand is hit by time bar as the details of reversals made by them in respect of the inputs used other than for manufacture of final products were duly reflected in their monthly ER-I returns and hence extended period of demand cannot be invoked as there is suppression of facts on their p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the aforesaid word OR appearing in Rule 14, twice, could be read as AND by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole, we find no reason to read the word OR in between the expressions taken or utilized wrongly or has been erroneously refunded as the word AND . On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest. 5. It is his submission that such unambiguous ruling by Hon ble Apex Court prevails over any other judicial decision. He, therefore, asserts that the interest was correctly demanded under Rule 14 and penalty consequently became imposable under Rule 15. He, therefore, pleaded that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purposes other than manufacture, without maintaining separate accounts for such inputs but after reversing, a proportionate amount of CENVAT Credit availed on them and this cannot be considered as removal of inputs as such. Rule 3(5) of CCR 2004 reads as follows: (5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 9: Provided that such payment shall not be required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods is subsequently used in the manufacture of final products or the provision of taxable services, the manufacturer or output service provider, as the case may be, shall be entitled to take the credit of the amount equivalent to the CENVAT credit paid earlier subject to the other provisions of these rules. (5C) Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted under rule 21 of the Central Excise Rules, 2002, the CENVAT credit taken on the inputs used in the manufacture or production of said goods shall be reversed. 7. The term (factory or premises) does not appear to have been defined in this sub rule. Therefore, all that can be concluded is that if inputs on which credit has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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