Rule 6 Cenvat Credit payment on exempt clearances could not later be refunded after assessee chose exemption route.

Where Cenvat credit was taken on inputs used in both exempted and dutiable goods, Rule 6 required payment of an amount equal to 8% of the value of exempted clearances if separate input records were not maintained. Because the assessee itself made the 8% debit while clearing goods under exemption notifications, it could not later argue that the goods were neither exempt nor liable at nil rate to recover that amount. The refund claim was therefore not maintainable and was rejected.

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Issues: Whether the assessee was entitled to refund of the amount debited at 8% of the value of goods cleared under exemption notifications, when separate accounts for inputs used in exempted and dutiable goods were not maintained under Rule 6 of the Cenvat Credit Rules, 2001.

Analysis: The goods were cleared under exemption notifications and the assessee itself had made the 8% debit in the prescribed manner because Cenvat credit had been availed on inputs used in the manufacture of both dutiable and exempted goods. In the absence of separate records for inputs used in exempted and dutiable goods, the statutory scheme under Rule 6 required payment of an amount equal to 8% of the value of the exempted clearances. Having claimed exemption and followed that course, the assessee could not later contend that the goods were neither exempt nor chargeable at nil rate so as to seek refund of the amount debited.

Conclusion: The refund claim was not maintainable and was rightly rejected.

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