9911796707
TMI Blog2024 (7) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with by the assesse - HELD THAT:- In view of the findings of facts arrived at by the CESTAT, it is not in dispute that the respondent has reversed the Cenvat Credit proportionate to the credit on input service used for exempted goods along with interest. The credit though availed at the time of receipt of input service but after reversal thereof along with the interest, the respondent never availed the credit. As per option given by Rule 6 (3) of the Rules which has come into effect from 01.04.2008, the appellant could not have insisted upon the payment of 10% amount of the value of the exempted goods when the petitioner has opted for the reversal of the Cenvat Credit on the input goods and services used for the exempted goods along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, Customs (Adjudication)-Surat-II : (a) Whether the Hon'ble CESTAT, is correct in holding that if the assessee reversed/paid proportionate Cenvat credit in respect of common input service used in the manufacture of exempted goods the demand equal to 10% would not sustain. Whether, the proportionate reversal of cenvat by the assessee is proper and admissible ignoring the conditions stipulated under Rule 6 (3) (b) of Cenvat Credit Rules, 2004. (b) A significant legal question arises as to whether the Tribunal properly acted as the appellate authority under Section 35C of the Central Excise Act, 1944 because the Hon'ble Tribunal does not explicitly address/verify whether the conditions stipulated under Rule 6 (3) (b) of Cenvat Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate rate should not be recovered from them under Rule 14 of Cenvat credit Rules, 2004 and or proviso to Section 11AB of Central Excise Act, 1944, on the duty so evaded amounting to Rs. Rs. 2,98,15,4821- (iii) Penalty should not be imposed upon them under Rule of 15 (2) of Cenvat Credit Rules, 2004 under proviso to Section 11AC of Central Excise Act, 1944. 3.4. The respondent was also issued second show-cause notice dated 13.05.2010 for subsequent period July, 2009 to December, 2009 for recovery of Central Excise duty amounting to Rs. 35,79,520/- for the same cause as mentioned for the first show-cause notice. 3.5. The respondent-assessee by reply dated 11.10.2010 submitted that by Section 73 of the Finance Act, 2010, Rule 6 of the Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to period from September, 2004 to March, 2008 but for the period from April, 2008 to June, 2009, the adjudicating authority held that the respondent was liable to pay 10% amount of value of clearances of the exempted product as per Section 73 of the Finance Act, 2010 was only up to 31.03.2008. The appellant-authority, however, ignored Rule 6 (3) of the Rules which has been also amended with effect from 01.04.2008 and the provisions of Section 73 of the Finance Act, 2010 was brought on statute by inserting Sub-rule (7) of Rule 6 of the Rules only with a view to see that the assessees get the option of payment of Cenvat Credit which was attributable to the inputs or inputs services in relation to manufacture of the exempted goods. 3.8. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow either of the following options, as applicable to him, namely :- (i) the manufacturer of goods shall pay an amount equal to ten per cent. of value of the exempted goods and the provider of output service shall pay an amount equal to eight per cent. of value of the exempted services; or (ii) the manufacturer of goods or the provider of output service shall pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of exempted goods or for provision of exempted services subject to the conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter reversal thereof along with interest the position is as if credit was not availed. 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 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. Moreover this issue has been consistently considered in various judgments wherein it was held that if the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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