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TMI Blog2022 (9) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... count at the beginning of the period as modified by Cenvat credit taken during the accounting period. The appellant have reversed the proportionate Cenvat credit in terms of Rules 6 (3)(ii) of CCR, thus, there is no application of Rule 6 (3)(i). It is further found that the situation is wholly revenue neutral, as both the units under common management and ownership are paying duty on their dutiable finished product namely cement and clinker. In case, duty was paid in terms of Rule 6(3)(i), the same was available as credit to unit 2 as input credit. Appeal dismissed - decided against Revenue. - Excise Appeal No. 50692 of 2017 with Excise Appeal No. 50703-50710 of 2017 - FINAL ORDER NO. 50786-50794 / 2022 - Dated:- 31-8-2022 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Sanjay Kumar Singh, Authorized Representative for the Department Shri Sanjay Grover, Advocate for the Respondent ORDER These appeals have been filed against common order-in-original dated 22/12/2016 by which 10 show cause notices were adjudicated on the common issue whereby the learned Commissioner have been pleased to drop the proposed demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are used for excavation of limestone from captive mines. Unit 1 takes the entire cenvat credit of the explosives. A part of the limestone excavated from the mines is used at Unit 1 for the manufacture of cement while part of the limestone excavated is cleared from mines to Unit 2 for the manufacture of cement. Undisputedly, Cement is taxable and both Unit 1 and Unit 2 are paying Central Excise Duty on the manufacture and clearance of cement. 2.6 In the above background, ten (10) different show cause notices were issued to the Respondent, wherein it was alleged that common inputs (explosives) were used by Unit 1 in the manufacture of dutiable goods (cement) and non dutiable goods (limestone) and no separate accounts (of explosive) were maintained for the same. Therefore, respondent i.e. Unit 1 has violated Rule 6(3)(b) and/or Rule 6(3)(i) of Cenvat Credit Rules, 2002/2004 and is liable to pay 10%/5%/6% of the sale value/value of limestone (exempted product) cleared to Unit 2. Penalty was also proposed to be imposed upon the respondent. 2.7 The Respondent filed separate replies to all the show cause notices and contested the demand both on merits and limitation i.e. deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as non-dutiable goods, as part of limestone was used in the manufacturer of cement and clinker, which are dutiable goods as well as limestones (exempted goods), which was transferred in part to its sister unit (Maihar Cement Unit II). The respondent unit-I is not keeping a separate account of inputs (explosives) used exclusively for manufacture of dutiable and non-dutiable products, as stipulated under Rule 6(3)(i) of Cenvat Credit Rules. As such their liability arises to pay duty on the exempted product cleared (by reversal of Cenvat credit) under Rule 6(3) (i) which have been substituted the erstwhile Rule 6(3)(b). Prior to amendment of Rules, 6(3)(b) provided that the manufacturer shall pay an amount equivalent to Cenvat credit attributable to the inputs, and input services used in, or in relation to, the manufacture of such exempt final product at the time of their clearance from the factory, or (Clause b) or pay an amount at the specified percentage of the total price, excluding taxes, if any, on the final exempted product charged by the manufacturer for the sale of such goods, at the time of their clearance from the factory. 5. The amended Rule 6(3)(b) of CCR w.e.f. 01/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d period to 1.3.2008 deserves to be dismissed. 10. Respondent further submits that even if limestone i.e. exempted product is cleared by unit 1 to unit 2, the demand under Rule 6(3)(i) is incorrect because the limestone is not a final product by itself. In other words, limestone is an intermediate product which is in turn used in the manufacture of dutiable final product i.e. cement. Assuming, that respondent had paid duty on limestone treating it as a final product, it would have been still eligible for credit of the same, since limestone is an intermediate product used in the manufacture of dutiable final product i.e. cement. Thus, it would have been a revenue neutral situation and an academic exercise altogether, and there is no loss of revenue to the department. In support of the same, respondent relied upon the judgment of Hon ble Supreme Court in the case of Escorts Ltd. Vs. CCE reported at 2004 (171) ELT 145 wherein identical facts were involved-the assessee cleared exempted tractor parts to its other unit and credit was sought to be denied under Rule 57C of the erstwhile Modvat Rules. The Hon ble Supreme Court held that merely parts are cleared from one unit to another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present demand under Rule 6(3)(i) does not survive and department appeals deserve to be dismissed. 12. The Respondent submits that the present issue is also covered by the earlier judgment of Tribunal in respondent s own case being final order no. A/53065/2016-EX(DB) dated 11.8.2016, wherein the department s appeal was dismissed and the same has attained finality. In other words, the same has not been appealed against till date. Thus, department cannot take a contrary view in the facts of present case and the batch of appeals deserve to be dismissed by this Hon ble Tribunal. 13. Having considered the rival contentions, we find that first of all, the show cause notices are misconceived for any demand under Rule 6(3)(b)/6(3)(i) due to the admitted fact that the appellant have admittedly reversed the proportionate credit on input/explosives for limestone cleared from the captive mines to Unit-2. Rule 6 provides for a mechanism to reverse Cenvat credit either proportionately, if it can be calculated, and in the alternative, if the same cannot be calculated with ease, the rule provides for reversal of Cenvat credit taken on common inputs by reversing a specified percentage of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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