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TMI Blog2020 (12) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... tries Limited (hereinafter referred to as M/s. HNGIL) wherein raw materials received from M/s. HNGIL, after carrying out the process of proof machining and other activities which was classified under Central Excise Tariff i.e. other than raw cast articles of iron, are retuned back to M/s. HNGIL for use in further manufacture of glass bottles by HNGIL. 3. During the period, the Appellant has treated the above process as amounting to manufacture as the excise duty was paid on the finished goods by M/s, HNGIL and thus the appellant was taking the benefit of Notification No. 214/86-CE and no excise duty was paid by the Appellant. Also, the job charges received by the Appellant from M/S HNGIL was exempt from Service Tax vide notification No. 08/2005-ST dated 1st March, 2005 for the period up to 30/06/2012 and under clause (f) of section 66D of the Finance Act, 1994 w.e.f. 1st day of July'2012. The appellant availed Cenvat credit under Cenvat Credit Rules, 2004 on input and input services used in relation to the manufacture of finished goods as well as provision of job work services. In this background, a Show cause notice (SCN) dated 10.09.2015 was issued by the Service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 10,37,335 Process amounting to Manufacture 66,60,770 89,60,435 93,07,640 1,21,54,227 3,70,83,072 Trade Sale (10% OF COST OR DIFF OF SALE AND COST PRICE, WHICH EVER IS HIGHER 1,61,333 1,86,700 85,392 1,62,708 5,96,133 Exempt Turnover 68,22,103 91,47,135 93,93,032 1,23,16,935 3,76,79,205 Total Turnover 84,19,304 1,41,71,094 1,50,30,728 1,80,95,885 5,57,17,011 Ratio for Reversal 0.81 0.65 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . M/s Philips Carbon Black Ltd. VERSUS C C Ex & Service Tax, Durgapur Excise Appeal No.76122 of 2016- FINAL ORDER NO.76973-76975/2019 dated 17/12/2019 c. M/s ETRANS SOLUTIONS PVT LTD Vs COMMISSIONER OF CGST AND CENTRAL EXCISE, KOLKATA 2019-TIOL-3327-CESTAT-KOL d. M/s ROCKEY MARKETING CHENNAI PVT LTDVs THE COMMISSIONER OF SERVICE TAX, II, CHENNAI 2020-TIOL-1585-CESTAT-MAD 10. The learned Authorized Representative for the Revenue justifies the impugned orders. 11. Heard both sides through video conferencing and perused the appeal records. 12. The short issue that arise for consideration in the instant appeal is whether appellant is required to pay 5%/6% of exempted services provided by them in terms of Rule 6(3)(i) when the appellant paid the actual credit attributed to the exempted services in terms of Rule 6(3A) along with interest following the option available under Rule 6(3)(ii). The relevant rule is reproduced below: [Obligation of a manufacturer or "RULE 6. producer of final products and a [provider of output service]]. - (1) The CENVAT credit sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-rule (3A); or (iii) maintain separate accounts for the receipt, consumption and inventory of inputs as provided for in clause (a) of sub-rule (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. The provisions of sub-clauses (i) and (ii) of clause (b) and sub-clauses (i) and (ii) of clause (c) of sub-rule (3A) shall not apply for such payment : Provided that if any duty of excise is paid on the exempted goods, the same shall be reduced from the amount payable under clause (i) : Provided further that if any part of the value of a taxable service has been exempted on the condition that no CENVAT credit of inputs and input services, used for providing such taxable service, shall be taken then the amount specified in clause (i) shall be [six per cent.] of the value so exempted.] [Provided also that in case of transportation of goods or passengers by rail the amount required to be paid under clause (i) shall be an amount equal to 2 per cent. of value of the exempted services.] Explanation I. - If the manufacturer of goods or the provider of output ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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. Therefore we do not understand that when the appellant have categorically by way of their intimation opted for option provided under subrule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. 5.5 As discussed above and in the facts of the case that actual Cenvat credit attributed to the exempted services used towards sale of the bought out cars in terms of Rule 6(3A) comes to Rs. 4,06,785/where as adjudicating authority demanded an amount of Rs. 24,71,93,529/. In our view, any amount, over and above Rs. 4 ,06,785 /is not the part of the Cenvat Credit, which required to be reversed. The legislator has not enacted any provision by whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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