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TMI Blog2020 (1) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... division to the extent power was sold to the State grid, at the end of each month and the same is also evident from the annexure to the notices - the reversal of such proportionate cenvat credit in respect of inputs used within the power division at the end of each month is sufficient compliance with the provisions of Rule 6(2) of the CCR in letter and spirit. Reversal of proportionate cenvat credit in respect of the common input used in the manufacture of exempted goods is an option duly permitted under Rule 6(3)(ii) of the CCR itself. Non-compliance with the procedure prescribed under Rule 6(3A) of the CCR does not result in the manufacturer losing his substantive right to avail the option of reversing proportionate credit, as such procedural lapse is condonable and denial of substantive right on such procedural failure is unjustified. Appeal allowed. - Excise Appeal No.76122 of 2016, 75799 of 2017, 78861 of 2018 - FINAL ORDER NO.76973-76975/2019 - Dated:- 17-12-2019 - HON BLE SHRI P. K. CHOUDHARY, JUDICIAL MEMBER AND HON BLE SHRI BIJAY KUMAR, TECHNICAL MEMBER S/Shri Arvind Baheti Rahul Dhankar, both C.A. for Appellant Shri H.S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold. Such proportionate reversals were duly reflected in the statutory monthly returns filed by the assessee and the same remains undisputed. 3. Proceedings were initiated against the assessee for alleged failure to maintain separate accounts in respect of inputs used in the manufacture of dutiable final product and electricity wheeled out to the State grid by issuance of 5 different Show-cause Notices covering the period December 2008 to June 2016 demanding payment of 5% / 6% as applicable of the sales value of electricity cleared to the State grid under Rule 6(3)(i) of the Cenvat Credit Rules. The Notices proceeded on the premise that if the assessee was maintaining separate records under Rule 6(2) of the CCR as claimed, there could be no question of proportionate reversals being made by the assessee at the end of each month. 4. All the 5 Notices were adjudicated against the Appellant vide 2 different Orders bearing No. 104 - 107 dated 10 March 2016 covering the period December 2008 to September 2015 and Order-in-Original No. 100 dated 27 February 2017 for the period October 2015 to June 2016. Both the adjudication Orders have treated off/lean ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eins Ltd. [2015 (325) E.L.T. 165 (Tri. - Del.) para 8] ; (ii) CCE Vs. Gland Pharma - [2016 (343) ELT 502 (Tri. Bang.) para 4] ; (iii) Chandrapur Magnet - 1996 (81) ELT 3 (SC). (c) Assuming without admitting that such proportionate reversals at the end of each month militates against the requirement of Rule 6(2), there is no provision in law that if an assessee does not follow any of the options prescribed in Rule 6(3) of the CCR then payment of 5% / 6% under Rule 6(3)(i) of the CCR will be automatically applied as Rule 6 of the CCR is not aimed at revenue maximization but only to ensure that no credit is allowed of inputs used in the manufacture and clearance of the exempted goods. Reliance in this regard is placed on the following decisions: (i) Cranes Structural Engineers Vs. CCE 2017 (347) ELT 112 (para 4.1) ; (ii) Mahindra Mahindra Vs. CCE 2016 (8) TMI 436 (para 5). (d) Rule 6 of the CCR, 2004 in any event, was not applicable to non-excisable goods up to 1 March 2015 when an explanation was inserted through a prospective Notification No. 6/2015 dated 1 March 2015 so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, following judicial discipline we are inclined to not take any different view of the matter. 8. Lex non cogit ad impossibilia is a well settled legal principle and we see merit in the contentions of the assessee that separate records in respect of common inputs could be maintained only when two final products are manufactured. Within the power division it was not possible to segregate the inputs at the stage of receipt itself, based on the ultimate use of the power post its production/generation. It is undisputed that the assessee had been making reversal of the proportionate cenvat credit attributable to inputs consumed in the power division to the extent power was sold to the State grid, at the end of each month and the same is also evident from the annexure to the notices. Therefore, respectfully following the ratio of the decisions rendered in the Goyal Proteins (para 8) Gland Pharma case (para 4) supra we concur that reversal of such proportionate cenvat credit in respect of inputs used within the power division at the end of each month is sufficient compliance with the provisions of Rule 6(2) of the CCR in letter and spirit. 9. The issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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