Rule 6 Cenvat Credit liability on mixed dutiable and exempt clearances upheld; refund of the amount was rejected.

Rule 6 of the Cenvat Credit Rules applies where excisable goods are cleared partly on payment of duty and partly under exemption using common inputs. The obligation under Rule 6(3)(a) depends on the nature of the clearances, not on whether the exempted and dutiable clearances relate to two different goods. On that basis, payment equal to 10% of the value of the exempted clearances was held to be correctly made, and refund of the amount was not admissible.

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Issues: Whether payment of 10% of the value of exempted clearances under Rule 6(3)(a) of the Cenvat Credit Rules was required where the same goods were cleared both on payment of duty and under exemption, and whether refund of such amount was admissible.

Analysis: Rule 6 applies where excisable goods are cleared both on payment of duty and under exemption and common inputs are used in the manufacture of such clearances. The liability under Rule 6(3)(a) is not confined to situations involving two different types of goods; it is attracted by the nature of the clearances, namely dutiable and exempted. On that basis, the amount equal to 10% of the value of the exempted goods was correctly paid.

Conclusion: The payment made by the appellant was in accordance with Rule 6(3)(a), and no refund was due. The appeal failed.

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