TaxTMI 
TaxTMI 
2009 (10) TMI 347
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....lants engaged in the manufacture of dutiable aerated water, Limca and Sprite and exempted fruit pulp based drink Maaza, had taken and utilized cenvat credit on common inputs and input services during the period 4/03 to 12/07 without maintaining separate accounts for receipt, consumption and inventory of inputs and input services. As the assessee had not maintained separate accounts for receipt, consumption and inventory of inputs and input services meant for use in the manufacture of dutiable final products Limca and Sprite and exempted Maaza, it was required to pay duty at the rate of 10% of the sale price of Maaza in terms of Rule 6(3)(b) of the CCR 2004. Accordingly, the Commissioner demanded an amount of Rs. 4,73,73,135/- along with applicable interest and imposed equal penalty on a finding of suppression of fact by the assessee of use of common inputs and services without maintaining the required records. 2. The Commissioner relied on the judgment of the Apex Court in CCE Nagpur v. Ballarpur Industries [2007 (215) E.L.T. 489 (S.C.)] and held that CCR (3)(b) applied to the case on hand and demanded an amount @8% up to 10-9-2004 and @ 10% with effect from 10-9-2004 of the pri....
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.... ETA Technology Ltd. v. CCE, Bangalore [2007 (212) E.L.T. 371 (Tri. -Bang.) = 2007 (6) S.T.R. 207 (Tri. - Bang.)] (3) Ruchi Soya Industries Ltd. v. CCE [2007 (82) RLT 624] (4) GMR Technologies & Industries Ltd. v. CCE, Visak [2008 (223) E.L.T. 246] It is submitted that the adjudicating authority had ignored the ratio of these decisions and therefore, the impugned order was bad in law. It is also submitted that the Hon'ble High Court of Gujarat had approved the order of the Tribunal to the effect that reversal of Cenvat credit on common inputs was adequate Compliance of Rule 6 vide its decision in the case of CCE v. Maize Products - 2009 (234) E.L.T. 431 (Guj.) = 2008-TIOL-596-HC-AHM-CX. Following decision/judgements are relied on in support of the claim that when the credit taken on that portion of inputs used in the manufacture of exempted products is reversed, the effect would be as if no credit was availed on the inputs used in the manufacture of exempted products: (i) Chandrapur Magnet Wires (Pvt.) Ltd. [1996 (81) E.L.T. 3 (S.C.)] (ii) CCE, Mumbai v. Philips India Ltd. [2006 (200) E.L.T. 106 (Tri. - Mum.]. Reliance is also placed on the decision of the Tribuna....
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....e and exempted Maaza during the material period without maintaining separate accounts as prescribed. The appellants reversed the cenvat credit relatable to inputs used in relation to Maaza manufactured and cleared during the material period, after such clearances. The dispute is whether the assessee has discharged its obligation under Rule 6 of CCR. The appellants have relied on the following judicial authorities in support of the claim that when the credit availed in relation to exempted final products is reversed that would be sufficient compliance with Rule 6(3)(b) of CCR:- (i) Pepsico Holdings Pvt. Ltd. v. CCE - 2008 (228) E.L.T. 452 (Tribunal) = [2008 (155) ECR 236 (T) (ii) Nicholas Piramel (I) Ltd. v. CCE [2008 (232) E.L.T. 37 (Tri. - LB)] (iii) CCE, Ahmedabad v. Maize Products [2009 (234) E.L.T. 431 (Gujarat)] (iv) Dr. Writer's Food Products Pvt. Ltd. v. CCE, Pune-II - 2009 (247) E.L.T. 391 (Tribunal) = 2009-TIOL-846-CESTAT-MUM) 5.3 As regards the penalty, it is submitted that there existed confusion as to their liability. The liability was believed to be only in respect of direct inputs and not water treatment chemicals which were used in relation to the manu....
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....the goods. Undisputedly these provisions are not intended to raise revenue for the government. By implementing the provisions in the manner as ordered by the Commissioner, astronomical sums are demanded for taking credit of relatively small amounts, for instance in CCE, Mumabi-VI v. Philips India Ltd. [2006 (200) E.L.T. 106 (Tri.-Mumbai)] Rs. 1,09,21592 was demanded in the impugned order for taking inadmissible credit of Rs. 87569/-, in Ruchi Soya Industries Ltd v. CCE, Mangalore [2007 (82) RLT 624 (Cestat -Bang.)] the demand impugned was Rs. 84,95,66,016/- for taking credit of Rs. 26,59,546/- and in Sirpur Paper Mills v. CCE, Hyderabad [2006 (205) E.L.T. 188 (Tribunal) = (2005 (71) RLT 336 (CESTAT-Ban.)], the corresponding figures were Rs. 2.6 crores and Rs. 4.29 lakhs. The Tribunal vacated these demands as not legal. Appellants in the instant case reversed appropriate amount of credit in line with the above reading of the provisions and paid also interest. In the circumstances, we find that there is no legal justification for demand of Rs. 4,73,73,135/- from the appellants. The Commissioner had followed the judgment of the Apex Court in the case of Commissioner of Central Excise,....