2010 (7) TMI 871 - AT - Central Excise

Court Upholds Impugned Order Applying CENVAT Credit Rules to Acid Clearance

The court upheld the impugned order and dismissed the appeal, ruling that Rule 6 of the CENVAT Credit Rules, 2004 applies to assessees clearing ... CENVAT credit - reversl - separate records not maintained - Held that: - Rule 6 which is the relevant rule in the present case, is pari materia with Rule 57CC in the sense that both require manufacture of two categories of products, namely, one excisable and the other exempted - decided against Revenue. Issues: Applicability of Rule 6 of CENVAT Credit Rules, 2004 on assessees clearing 'Hydrofluoric Acid' and 'Sulphuric Acid' under duty payment and exemption.Analysis:1. The Revenue argued that Rule 6 of the CENVAT Credit Rules, 2004 applies to the assessees clearing 'Hydrofluoric Acid' and 'Sulphuric Acid' under both duty payment and exemption. The contention was that as the assessees were not maintaining separate accounts and were clearing these products under exemption, they should pay an amount equal to 10% of the total price of the exempted final product.2. The judge noted that there was no dispute that both products were excisable/dutiable. The exemption from duty liability applied only when the goods were cleared to specific categories of customers as per the relevant notification. The judge referred to previous Tribunal decisions to support the view that even though the goods were exempt under certain conditions, they remained dutiable. The decisions cited were Greaves Ltd. Commissioner of Central Excise, Chennai [2007 (211) E.L.T. 563 (Tri.-Chennai)] and Commissioner of Central Excise, Madurai v. DCW Ltd. [2009 (234) E.L.T. 163 (Tri.-Chennai)], which were related to Rule 57CC of the Central Excise Rules, 1944. The judge highlighted the similarity between Rule 6 and Rule 57CC, as both rules pertain to the manufacture of two categories of products, one excisable and the other exempted.3. Based on the precedent set by the aforementioned decisions, the judge upheld the impugned order and dismissed the appeal. The ruling was made in line with the interpretation that even though the goods were exempt under specific conditions, they were still considered dutiable. The judgment was delivered after considering the applicability of Rule 6 in the context of the assessees clearing 'Hydrofluoric Acid' and 'Sulphuric Acid' under both duty payment and exemption scenarios.