2011 (8) TMI 594

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....tue of which the question of the petitioners having availed of such Cenvat credit on inputs which are not dutiable was the center of controversy. With respect to such issue, the Department issued show cause notice and such proceedings are pending. However, during the pendency of the proceedings, the Legislature made certain amendments by virtue of Finance Act 2010. Such amendments permitted the manufacturers to pay amount in accordance with the provisions towards input credit attributable to the inputs used in relation to manufacture of final products which were exempt from excise duty or chargeable to nil rate of duty along with interest and make application to the Commissioner of Central Excise along with specified documents. Such amendme....

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....rder dated 3.1.2011 rejected the application of the petitioner mainly on two grounds. Firstly, he was of the opinion that the exact figures of the Cenvat credit attributable to the exempted goods manufactured by the applicant are not available under which situation, the best way would be to distribute the Cenvat Credit pertaining to the various inputs utilized during the relevant period to the dutiable and exempted goods as per their total clearance value. Second ground of rejection was, according to the Commissioner, that the petitioners failed to supply necessary documents within two months though demanded before 3.1.2011. The Commissioner, therefore, concluded as under:   "It appears that the applicant has merely tried to insert an....

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....rcation of duty attributable to exempted and unexempted goods was not possible and that therefore the same ought to have been taken in the ratio between the two sets of provisions and further that necessary documents though demanded were not produced.   Case of the petitioners, however, is that the documents were produced. If any documents or information are still required, the petitioners would supply the same. However, the effect of the rejection of the application of the petitioners would be very harsh and large amount of Cenvat credit availed would have to be reversed for a small amount of credit utilized even admitting the Department's claim, attributable to exempted goods.   In peculiar facts and circumstances of the case,....