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TMI Blog2021 (11) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... tionate credit in respect of furnace oil used in or in relation to manufacture of exempted goods and also paid the interest @ 24%, the demand of 10% of the value of exempted goods will not sustain. Once the proportionate credit in respect of the inputs used in the manufacture of exempted goods has been reversed and interest thereupon was paid in case of any delay in reversal, the demand of 10% of the value of exempted goods under Rule 6(3) will not sustain - since the appellants have reversed the proportionate credit along with payment of 24% interest, the demand of 10% of value of the exempted goods in terms of Rule 6(3) is not sustainable - Appeal allowed - decided in favor of appellant. - Excise Appeal No. 1040 of 2012 - A/87101/2021 - Dated:- 9-11-2021 - HON BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) AND HON BLE MR. C.J. MATHEW, MEMBER (TECHNICAL) Shri Anil Balani, Advocate for the Appellant Shri Sanjay Hasija, Supdt., Authorized Representative for the Respondent ORDER PER: RAMESH NAIR The issue involved is that as to whether the appellant is liable to pay 10% of the value of the exempted goods in terms of Rule 6(3) when they had availed the CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment provision this issue was considered. In catena of judgments, various Courts and Tribunal has consistently held that if the assessee reversed the proportionate credit even though belatedly and paid the interest for delay in reversal, the demand of 5%/10% in terms of Rule 6(3) will not sustain. Therefore, since the appellant admittedly reversed the proportionate credit in respect of furnace oil used in or in relation to manufacture of exempted goods and also paid the interest @ 24%, the demand of 10% of the value of exempted goods will not sustain. In support of our view, relevant judgments alongwith relevant portions are reproduced below:- (i) Unimed Technologies Ltd. Vs. Commissioner of Central Excise, Vapi 2012 (278) ELT 461 (Tri-Ahmd). 4. The relevant facts in brief that arise for consideration are the appellant herein are engaged in the manufacture of excisable as well as exempted goods. The appellants have availed Cenvat credit on inputs and packing materials which are common inputs and are used in both dutiable and exempted goods. In the absence of non maintenance of separate accounts in respect of duty and exempted goods as per the provisions of Rule 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icity comes after the steam but before the final product viz. Iodized salt vacuum salt. Further once the amount is paid on steam, the requirement of Rule 6(3)(b) is fulfilled and therefore we do not find any need to consider the arguments advanced in support of their claim that reversal of credit would amount to not taking the credit at all. Further other judgments cited by the party also need not have to be discussed since the requirements of Rule 6(3)(b) would get fulfilled. More over as far as the pet coke and furnace oil are concerned, steam has to be taken as a final product because electricity and other products are produced only subsequently. It is not the case of the Department or the appellant that steam or electricity are byproducts and not final products as far as pet coke/furnace oil are concerned. In fact there is no other product which arises in this process. 7. The next issue to be considered is the demand for ₹ 2,77,15,038/- for the periods from 2001-02 to 2005-06. The appellants have contested the demand on the ground of limitation. It has been said that all the facts were in the knowledge of the Department and separate proceedings had been initiated to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oteins 2008 (232) ELT 156 (Tri-Del) 5. We find that the appellants are engaged in the manufacture of excisable and exempted goods and were taking credit in respect of common inputs. Two show cause notices were issued to the appellants for demand of duty on the ground that as per provisions of Central Excise Rules in respect of exempted goods manufactured out of common inputs, manufacturer has to pay 8% or 10% of the value of the exempted goods. 6. Demand is for the period 30-4-2003 to 28-2-2005. Two show cause notices were issued, one for the period 30-4-2003 to 30-11-2004 on 21-9-2005 by invoking extended period of limitation and, second for the period 1-12-2004 to 28-2-2005 on 9-11-2005. The appellants were regularly filing monthly return showing clearance of goods on payment of duty as well as without payment of duty. On examining the returns the Revenue vide letter dated 26-6-2003 directed the appellants to pay 8% of the value of exempted goods. As the Revenue was aware on 26- 6-2003 that the appellants were taking credit in respect of common inputs and clearing products without payment of duty as well on payment of duty, therefore, charge of suppression of facts with i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notices. The assessee shall produce the necessary evidence in the form of chartered accountant s certificate for the relevant period. If any further credit is to be reversed, the same shall be reversed within four weeks from the date of receipt of the communication from the department. In view of the above decision of the Tribunal the demand for the normal period is set aside and the matter is remanded to the adjudicating authority with the direction to accept the offer of the appellants to reverse the entire credit on the common inputs and the Revenue shall redetermine the credit taken on common inputs and the appellants will produce necessary evidence in respect of credit availed on common inputs. Impugned order is set aside and the appeal is disposed of as indicated above. 6. In view of the above judgments and many more judgments on the same issue, it was consistently held that once the proportionate credit in respect of the inputs used in the manufacture of exempted goods has been reversed and interest thereupon was paid in case of any delay in reversal, the demand of 10% of the value of exempted goods under Rule 6(3) will not sustain. Accordingly, we are of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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