9911796707
TMI Blog2020 (3) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;the Act') against the order dated 10.8.2016 passed by the Customs, Excise & Service Tax Appellate Tribunal, Chandigarh (for short, 'the Tribunal') claiming following substantial questions of law: "(A) Whether the impugned order dated 10.8.2016, Annexure A-3 is based on surmises and conjectures and is therefore perverse and untenable in the eyes of law? (B) Whether the Ld. Tribunal failed to appreciate the evidence on record to presume that the inputs at the start of manufacture are available for credit and therefore irrespective of the fact that the goods which were finally cleared were exempted, the assessee would be entitled to benefit of Rule 6(3) of the Cenvat Credit Rules? (C) Whether the respondent who at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E dated 17.3.2012 and if the GMADA failed to get exemption certificate under the said notification, in that case duty was to be paid on the pipes. M/s Welspun Corporation Ltd. (for short, 'WCL') acquired a unit in July, 2012 and started manufacturing of pipes. WPL placed the order on 20.7.2012 to WCL for the pipes which were to be supplied by it to GMADA. On 20.8.2012, GMADA obtained an exemption certificate. On 5.11.2012, WPL placed another order to WCL for supply of pipes and on the supply duty was leviable. It would be worth taking note at this stage that both the orders were for supply of HSAW pipes 2250 mm D 12 mm wall thickness. The period in dispute is from September, 2012 to June, 2013 in which it was claimed by assessee tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit was malafide and the order placed in November, 2012 for supply of pipes leviable to duty was merely with the intention to get benefit of Rule 6. However, the said allegation of malafide or fraud could not be substantiated by the material on record. For reference, Rule 6(1) to (3) of the Rules is reproduced as under: "(1) The CENVAT credit shall not be allowed on such quantity of input used in or in relation to the manufacture of exempted goods or for provision of exempted services, or input service used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services, except in the circumstances mentioned in sub-rule (2): Provided that the CENVAT credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sub-clauses (ii) and (iv) of clause (b). (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacture of goods or the provider of output service, opting not to maintain separate accounts, shall follow any of the following options, as applicable to him, namely:- (i) pay an amount equal to six per cent of value of the exempted goods and exempted services; or (ii) pay an amount as determined under sub-rule (3A); or (iii) maintain separate accounts for the receipt, consumption and inventory of inputs as provided for in clause (a) of subrule (2), take CENVAT credit only on inputs under sub-clauses (ii) and (iv) of said clause (a) and pay an amount as determined under sub-rule (3A) in respect of input services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f removal or for provision of exempted services. Explanation III.-- No CENVAT credit shall be taken on the duty or tax paid on any goods and services that are not inputs or input services." Rule 6(1) states that no cenvat credit shall be allowed on the inputs used in relation to manufacture of exempted goods. Sub-rule (2) provides exception to sub-rule (1), it deals where the manufacturer or a provider of output service is involved in both dutiable as well as exempted goods or services. For availing the CENVAT credit, separate accounts are to be maintained as envisaged in clauses (a) and (b) to the sub-rule. Sub-rule (3) starts with a non-obstantate clause and contemplates the situation where separate accounts are not maintained and pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umptions and the argument falls flat in view of the finding recorded by the Tribunal that on 5.11.2012 the goods were cleared on payment of duty. Without there being any manufacturing of dutiable goods prior to 4.11.2012, the goods could not have been cleared on 5.11.2012 on payment of duty. More-so, when clearance and supply of dutiable goods is accepted and there is no denial to the fact that a purchase order existed for supply of dutiable goods, on mere assumptions the intention cannot be determined or it can be concluded that the conduct was fraudulent. The authorities have also not appreciated the difference in manufacture and clearance of goods. In view of the findings of fact recorded by the Tribunal, it cannot be concluded that WC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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