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of <h1>Appeal remanded for adherence to Cenvat scheme rules on credit for inputs. Circular's provisions crucial.</h1> <h3>LAXMI CEMENT Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR</h3> The appeal was disposed of by way of remand, emphasizing adherence to Cenvat scheme rules on credit for inputs used in manufacturing both dutiable and ... Modvat/Cenvat Issues:Appeal against Adjudication Order regarding Modvat credit for explosives used in mines and clearance of limestone without duty payment.Analysis:The Appellants, engaged in cement and clinker manufacturing, appealed against a demand to recover 8% under Rule 57CC of Central Excise Rules for limestone cleared without duty payment. They had availed Modvat credit for explosives used in mines. Appellants argued they had already reversed the credit taken on explosives, citing a Govt. Circular of 2001 and a Tribunal decision in a similar case. Revenue pointed out an amendment to the Circular in 2002, emphasizing the need for separate records for inputs used in exempted goods manufacturing.The Circular clarified the Cenvat scheme's basic principle that credit is allowed if duty is paid on final products. It highlighted Rule 6, stating credit is not allowed on inputs used in exempted goods' manufacture unless specific conditions are met. If the manufacturer fails to meet these conditions, credit on such inputs is incorrect, and recovery is covered by Rule 12. As the Circular was not before the Adjudicating Authority, the Order was set aside for reconsideration in light of the Circular. The matter was remanded for a fresh decision after considering the amended Circular, with a reasonable opportunity for the Appellants to be heard.In conclusion, the appeal was disposed of by way of remand, emphasizing the importance of adhering to the Cenvat scheme's rules regarding credit on inputs used in manufacturing both dutiable and exempted goods. The Circular's provisions and the need for separate records for exempted goods were crucial in determining the correctness of credit availed, leading to the remand of the case for a fresh decision by the Adjudicating Authority.
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