Rule 6(3)(b) Cenvat Credit relief sustained where the department failed to displace binding precedent or show interference grounds.

Departmental challenge to relief granted under Rule 6(3)(b) of the Cenvat Credit Rules failed because the appeal was defective and unsupported by the record. The show cause notice and original adjudication order were not placed on record, and the prayer was misconceived since setting aside the appellate order would only revive an order that had not been properly attacked. The appellate authority had followed an earlier decision in the assessee's own case on identical facts, and the department did not show why that precedent was inapplicable. A mere proposal to appeal against another High Court ruling was insufficient to justify interference, so the assessee's relief was sustained.

---

---

Issues: Whether the department could succeed in challenging the order allowing relief to the assessee on the basis of Rule 6(3)(b) of the Cenvat Credit Rules for alleged failure to maintain separate accounts for common inputs used in exempted products.

Analysis: The appeal was defective in that the original adjudication order and the show cause notice were not placed on record. The challenge to the appellate order was also misconceived because setting aside that order would only revive the original order, which itself was in favour of the department was against the assessee, showing lack of application of mind in the prayer. The appellate order had followed an earlier decision in the assessee's own case in an identical matter, and the department did not demonstrate any reason why that decision was inapplicable. A mere proposal to appeal against another High Court decision relied on by the appellate authority did not furnish a ground for interference.

Conclusion: The departmental appeal was not well founded and was rejected.

Final Conclusion: The assessee's relief granted by the lower appellate authority was sustained, and the department's challenge failed.

Ratio Decidendi: A departmental appeal will not be entertained on merits where it does not displace the precedent relied upon by the lower authority and fails to show any legal or factual basis for interference with the relief granted to the assessee.

---