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TMI Blog2020 (1) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 to March 2010 as provided under Rules then the question of demand of amount of 10% on the value of exempted goods as per Rule 6(3)(i) does not arise - it is the option of the assessee to choose either of the three options given under Rule 6 and the Department cannot substitute its own option and this has been settled by the Tribunal in the case of M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2015 (8) TMI 24 - CESTAT MUMBAI] and also by the recent decision of the Telangana High Court in the case of M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] . Demand of ₹ 10,03,983/- pertaining to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER The present appeal is directed against the impugned order dated 03.07.2012 passed by the Commissioner (Appeals) whereby the Commissioner (A) has rejected the appeal of the appellant. 2. Briefly the facts of the present case are that the appellant are the manufacturers of excisable goods falling under Chapter36,38,29 and 27 of the CETA, 1985 and were availing CENVAT credit of duty/Service Tax paid on inputs/input services under CCR, 2004. During the course of audit of the appellant company, it was noticed that the appellant had availed the CENVAT credit of the duty/Service Tax paid in respect of the inputs/input services used in the manufacture of the exempted final product (i.e. peat mixture falling und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l precedents. He further submitted that the entire period of dispute can be split into two periods viz. July 2005 to March 2008 and April 2008 to March 2010. As regards the period from July 2008 to March 2010, the appellant has already reversed proportionate credit attributable to input services used for the manufacture of exempted goods. He further submitted that the fact of reversal of proportionate credit is not disputed and the SCN itself appropriates the said sum. Therefore, for the said period, the learned Counsel submitted that the appellant has complied with the provisions of Rule 6(3)(ii) read with Rule 6(3A) of the CCR, 2004 and therefore the demand confirmed in the impugned order under Rule 6(3)(i) is not justified. He further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in or in relation to the manufacture of the exempted goods or for exempted services. If this is the objective then at the most amount which is to be recovered shall not be in any case more than Cenvat Credit attributed to the input or input services used in the exempted goods. It is also observed that in either of the three options given in sub-rule (3) of Rule 6, there is no provisions that if the assessee does not opt any of the option at a particular time, then option of payment of 5% will automatically be applied .. 4.2. He also submitted that the impugned order is opposed to the decision of the Hon ble Telangana High Court in the case of Tiara Advertising Vs UOI, 2019 (30) GSTL 474 wherein the Hon ble High Court int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESTAT-BANG. 4.3. He also argued that the appellant s records were periodically audited by the Internal Audit Party of the Department. This fact is also admitted in Audit Note No. 55/2010 dated 08.02.2010 placed on record wherein it is admitted by the Department itself that the appellant s records were audited previously during December 2008 and audited up to March 2008. Prior to this, the Department had conducted audit of the records on 20.12.2006 and 14.06.2007. Hence, three audit took place prior to the one conducted during February 2010 and the Department never raised any observation on the issue on hand and these facts were within the knowledge of the Department and hence, the question of any wilful suppression of fact i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand is barred by limitation for the reason that during the disputed period, there was a dispute regarding statutory interpretation of Rule 6 of the CCR and subsequently there was a retrospective amendment vide Finance Act, 2010 also. Secondly, I find that the present proceedings were initiated on the basis of audit objections and it is well settled that no suppression can be alleged on the basis of audit objection in view of the various decisions relied upon by the appellants cited supra. Further, I also find that in the present case, the appellant has placed on record Audit Note dated 08.02.2010 wherein Department itself has recorded that they had previously conducted audit of the records of the appellant during December 2008 aud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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