TaxTMI 
TaxTMI 
2011 (2) TMI 57
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....of the Commissioner (Appeals) for the period April 2006 to October 2006 for enhancement of penalty. All the appeals are having identical issue, therefore taken together and disposed of by common order. 2. The brief facts of the case are that M/s. CPIL are engaged in the manufacture of excisable goods i.e. cosmetic and toilet preparations and compound of aromatic chemicals and essential oils and mixture of odiferous substance. They also import finished goods on payment of duty. During the course of the business M/s. CPIL availed number of services which are used in relation of the manufacture of final products as well as in relation to selling and marketing of final products etc. As the appellants are having their head office situated in Mu....
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....ion Dish Waste Paste, Trading (local as well imported) Goods are duty paid, where applicable Charmis Face Cream -Do- -Do- 4. The issue involved in this appeal is whether the appellants are eligible for availment of CENVAT credit of service tax paid on the input service which were received by them in their business of manufacturing. The main allegation against the M/s. CPIL is that as these input service credit is availed by them in for their duty paid final products and as well as exempted final products, hence they are not entitled for input service credit as per CENVAT credit Rules 6(2), as the appellants are not maintaining separate account of input service credit for dutiable as well as exempted goods. 5. The contention of the de....
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....ion etc. * Services which were exclusively used in the manufacture of exempted products/nil duty products in a unit were also not considered for credit/distribution. 8. Alternatively and without prejudice, assuming the appellants cannot avail of full credit, the appellants are entitled to avail credit proportionate to the total sales of duty paid goods including goods manufactured by contract manufacturers, where excise duty is paid on the MRP, and the cost of the above mentioned input services is included in such MRP for the purposes of payment of Excise duty. 9. He further submitted that as there is no suppression of facts or wilful mis-statement as the appellants has informed to the department for availment of input service credit vi....
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....such output services which are chargeable to duty or tax as well as exempted goods or services, then the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable. (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer or the provider of output service, opting ....
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....ces, how to deal with the credit available to them. As per above provisions, the assessee has maintained separate account of input/input services for both dutiable as well as non-dutiable exempted goods. In case assessee failed to maintain separate accounts for input/input services, than the assessee shall pay an amount equal to 10% of total price excluding sale tax and other taxes, if any, paid on such goods of the exempted final product charged by the manufacturer for sale of such good at the time of such clearances from the factory. 14. In this case undoubtedly the appellants have not maintained separate account of input service credit (in dispute) separately for dutiable as well as non-dutiable exempted goods. The only option left with....