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TMI Blog2024 (4) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of Concrete Pumps, Concrete Mixer and Concrete Mixing Plants falling under Chapter Heading Nos. 84134000 and 84743110 respectively of the Central Excise Tariff Act, 1985. The appellant was issued two show cause notices. The first show cause notice dated 16.03.2012 was issued seeking demand of Rs.40,84,669/- being an amount equal to 5% of the value of exempted service rendered as "trading activity" for the period 01.04.2011 to 24.05.2011 as per Rule 6(3)(i) of the CCR, 2004 under proviso to Section 73(1) of the Finance Act, 1994 along with interest and penalty under Rule 15(1) of the CCR, 2004 read with Section 76 of the Finance Act, 1994. The second show cause notice dated 31.10.2012 and corrigendum dated 29.11.2012 was issued seeking demand of Rs.35,50,651/- being an amount equal to 6% of the value of exempted service rendered as "trading activity" for the period 01.04.2012 to 02.05.2012 as per Rule 6(3)(i) of the CCR, 2004 under proviso to Section 73(1) of the Finance Act, 1994 along with interest and penalty under Rule 15(1) of the CCR, 2004 read with Section 76 of the Finance Act, 1994. 2.2 The appellant filed detailed reply to the show cause notices contesting the demand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption availed by the appellant. 4.4 He further submits that reading of sub-clause (b) of Rule 6(3A) which provides that the payments are provisional for each month and therefore, there is nothing wrong to exercise the option at any point of time during the financial year. 4.5 He further submits that confirmation of demand under Rule 6(3)(i) of the CCR, 2004 would tantamount to deny the option provided to the assessee under the said rule. 4.6 He also submits that this issue is no more res integra and has been considered by various benches of the Tribunal and it has been consistently held by the Tribunal that exercise of option is only a procedural in nature and cannot deny the substantive benefits as provided under the rule. In support of his submission, he relies on the following case-laws: a) Mercedes Benz India (P) Ltd vs. CCE, Pune-I - 2015 (40) STR 381 (Tri. Mumbai) b) Rocky Marketing (Chennai) Pvt Ltd vs. CST, Chennai - Final Order No. 40936/2020 dated 03.11.2020 in Appeal No. ST/40279/2017 c) Emami Limited vs. CCE & ST, Valsad - Final Order No. 11791/2023 dated 25.08.2023 in Appeal No. E/11110/2015 d) Jai Balaji Industries Ltd vs. CCE & ST, Raipur - 2017 (352) ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder. Explanation 3. - For the purposes of this rule, exempted services as defined in clause (e) of rule 2 shall include an activity, which is not a ‗service' as defined in section 65B(44) of the Finance Act, 1994 [provided that such activity has used inputs or input services]. Explanation 4. - Value of such an activity as specified above in Explanation 3, shall be the invoice/agreement/contract value and where su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that are not inputs or input services. Explanation 3. - For the purposes of this sub-rule and sub-rule (3A),- (a) ―non-exempted goods removed‖ means the final products excluding exempted goods manufactured and cleared upto the place of removal; (b) ―exempted goods removed‖ means the exempted goods manufactured and cleared upto the place of removal; (c) ―non-exempted services‖ means the output services excluding exempted services.] [(3A) For determination of amount required to be paid under clause (ii) of sub-rule (3), the manufacturer of goods or the provider of output service shall follow the following procedure and conditions, namely :- (a) the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely :- (i) name, address and registration number of the manufacturer of goods or provider of output service; (ii) date from which the option under this clause is exercised or proposed to be exercised; (iii) description of inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final products were manufactured or no output service was provided in the preceding financial year, the CENVAT credit attributable to ineligible common credit shall be deemed to be fifty per cent. of the common credit; (v) remainder of the common credit shall be called eligible common credit and denoted as G, where,- G = C - D; Explanation.- For the removal of doubts, it is hereby declared that out of the total credit T, which is sum total of A, B, D, and G, the manufacturer or the provider of the output service shall be able to attribute provisionally and retain credit of B and G, namely, eligible credit and eligible common credit and shall provisionally pay the amount of credit of A and D, namely, ineligible credit and ineligible common credit. (vi) where manufacturer or the provider of the output service fails to pay the amount determined under sub-clause (i) or sub-clause (iv), he shall be liable to pay the interest from the due date of payment till the date of payment of such amount, at the rate of fifteen per cent. per annum; (c) the manufacturer or the provider of output service shall determine the amount of CENVAT credit attributable to exempted goods removed and pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the 30th June of the succeeding financial year till the date of payment of such amount; (f) the manufacturer or the provider of output service, shall at the end of the financial year, take credit of amount equal to difference between the total of the amount of the aggregate of ineligible credit and ineligible common credit paid during the whole year and the total of the amount of annual ineligible credit and annual ineligible common credit, namely, [{(A+D) aggregated for the whole year)} - {A(Annual) + D(Annual)}], where the former of the two amounts is greater than the later; (g) the manufacturer of the goods or the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of payment or adjustment, as per the provisions of clauses (d), (e) and (f) , the following particulars, namely :- (i) details of credit attributed towards eligible credit, ineligible credit, eligible common credit and ineligible common credit, month-wise, for the whole financial year, determined as per the provisions of clause (b); (ii) CENVAT credit annually attributed to eligible credit, ineligible credit, elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich option has to be availed. Revenue could not insist the appellant to avail a particular option. In the present case the appellant have admittedly availed option as provided under Rule 6(3)(ii) and paid an amount as required under sub-rule (3A) of Rule 6. As regard the compliance of the procedure and conditions as laid down for availing option as provided under sub-rule (3)(ii), we find that foremost condition is that the appellant is required to pay an amount as per the formula provided under sub-rule (3A) on monthly basis. However, we find that as per the provision, payment on monthly basis is provisional basis, therefore it is not mandatory that whole amount or part of the amount was required to be paid on every month. The appellant though belatedly calculated the amount required to be paid in terms provided under sub-rule (3A) of Rule 6, therefore to fulfill the condition, assessee should pay the said amount, which has been complied by the appellant. 5.2 As regard the delay in payment, if any, the appellant have discharged the interest liability on such delay. Regarding the compliance as provided under Clause (a) of sub-rule (3A) of Rule 6 the appellant while exercising th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case admittedly it is appellant who have on their own opted for option provided under Rule 6(3)(ii). The meaning of the option as argued by the Ld. Sr. Counsel is that "option of right of choosing, something that may be or is chosen, choice, the act of choosing". From the said meaning of the term 'option', it is clear that it is the appellant who have liberty to decide which option to be exercised and not the Revenue to decide the same. 5.4 We find that the appellant admittedly paid an amount of Rs. 4,06,785/- plus interest, this is not under dispute. Therefore in our view, the appellant have complied with the condition prescribed under Rule 6(3)(ii) read with sub-rule (3A) of Rule 6 of Cenvat Credit Rules, therefore demand of huge amount of Rs. 24,71,93,529/- of the total value of the vehicle amounting to. Rs. 494,38,70,577/- sold in the market cannot be demanded. We are also of the view that Rule 6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. The main objective of the Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in respect of input or input services which are used in or in relation to the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X
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