9911796707
TMI Blog2024 (12) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions prescribed under Rule 6(3)(ii) read with Rule 6(3A) are considered to have been sufficiently complied with. It has been held that main objective of Rule 6 ibid is to ensure that Cenvat credit on input or input services utilized in respect of exempted services is not availed of. In the case of JOST S ENGINEERING CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III [ 2013 (8) TMI 463 - CESTAT MUMBAI ], the Tribunal held as unsustainable the confirmation of demand to pay an amount of 5%/10% of the value of exempted goods when the appellant reversed not only the credit taken on input services used in the manufacture of exempted goods but also the credit taken on input services used in the manufacture of dutiable goods along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 2016-17 certain income earned on trading activity from sale of automobile vehicles along with spare parts etc. were noted. During the course of scrutiny of the Cenvat record of the respondents the department observed the availment of cenvat credit on common input services such as security, telephone and mobile services etc. used not only for taxable services, but also for sale of motor vehicles, spare parts, components and accessories. It is the contention of the department that the noticee failed to maintain separate accounts as per Rule 6(3) of Cenvat Credit Rules, 2004 in respect of the said exempted services despite having availed 100% Cenvat credit on input services and thereby had not followed the procedure as laid down under the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have perused the facts of the case and the available evidence on record and heard the contentions raised by both the parties. 8. It is an undisputed fact on record that in pursuance of the spot memo, the respondent had made good the amount of wrongly availed credit amounting to Rs.4,30,142/- and also paid applicable interest @ 15% as leviable thereon. We find from the records that the Ld. Commissioner has cited that in a similar case of Usha Martin, the MCM of the Commissionerate vide order dated 28.02.2017 had observed that wherein the auditor s view of reversal of proportionate cenvat credit has been approved, no show causwe notice was issued. That being the case, there ought not to be two varying considerations for the same issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010, the above provisions were made retrospectively applicable. Hon ble Gujarat High Court in case of Sh. Rama Multitech Ltd. v. UOI reported in 2011 (267) E.L.T. 153 (Guj.) has held that even if separate account have not been maintained, in view of retrospective amendment by Finance Act, 2010, a manufacturer using common inputs in or in relation to manufacture of dutiable as well as exempted final product would be entitled to reverse the proportionate Cenvat credit. In view of this position, during the period of dispute the option of paying an amount equal to 10% of the sale value of the exempted goods cannot be forced upon the appellant and the appellant would be entitled to reverse the Cenvat credit attributable to the inputs/input servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs.3,70,612/-. The Tribunal taking reference of Rule 6(3A) observed that the Rule does not mention that failure to intimate in writing to the department regarding option exercised, would lead to loss of the assessee s choice to avail the second option for approval of CENVAT credit under Rule 6(3) (ii). It held that, in any case, it cannot be said that failure to intimate the department would automatically result in application of Rule 6(3) (i) for the assessee. Further in several cases the failure of intimation to the department is held to be a procedural lapse. As regards the prayer to remand the matter, as asked for by the revenue for quantification of the proportionate credit, the Tribunal in the said case cited supra, stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee of liability to pay 10% of their price by virtue of such reversal of credit and paying interest thereon. Moreover, in the case of Commissioner vs. Jai Balaji Industries Ltd. [2017 (356) E.L.T. A48 (Chhattisgarh)], the Hon ble High Court of Chhattisgarh has held that .in respect of electricity generated within factory premises for captive use, and part of which sold out, by use of common inputs, the demand of 10%/5% value of wheeled out exempted electricity under Rule 6(3) of Cenvat Credit Rules, 2004, is not justified when the assessee had already reversed credit on proportionate basis for electricity sold out, along with interest, before issuance of show cause notice. Failure to follow procedure under Rules 6(3)(i), 6(3)(ii), an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
