TaxTMI 
TaxTMI 
2012 (12) TMI 507
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....to 8%/10% of the total price of the exempted final product as envisaged under Rule 57AD(I) of the Central Excise Rules,1944 read with Rule 6(3)(b) of the Cenvat Credit Rules. It was observed that assessee was availing CENVAT Credit on "end shields" and "stator housings" which are exclusively used in the manufacture of exempted windmill generators having capacity of 1000 KV to 1250KV. The other dutiable motors or generators manufactured by them are of capacity of 600KV to 650 KV. Since these inputs were exclusively used in the manufacture of exempted windmill generators, the credit availed on these inputs was not admissible to them under Cenvat Credit Rules. Accordingly, show-cause notices dated 29.3.2006 and 31.8.2006, covering the period from 1.10.2001 to 30.9.2005 and from 1.10.2005 to 30.4.2006 seeking recovery of the CENVAT Credit on these inputs used exclusively for manufacture of exempted goods, were issued to the assessee. Total duty demanded in these show-cause notices is Rs.1,89,17,525/-. The interest and penalties were also proposed to be imposed on the assessee. The case was adjudicated by the Commissioner by his Order No. 02/COMMR/2007-08 dated 30.4.2007 and duty amount....
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....ntended that the explanation III of the Rule 6(3)(c) of the Cenvat Credit Rules does not debar them from taking credit of duty paid on the excisable inputs used in the manufacture of exempted final products. He further contended that this explanation was added by a Notification No. 27/2005 dated 16.5.2005, therefore, there is no doubt that credit is admissible to these inputs prior to 16.5.2005. He also pointed out that reversal of 10% of the sale price of the exempted goods is more than total CENVAT Credit taken on all the inputs used in the manufacture of exempted goods and, therefore, there is no reason to demand duty from them as amount equivalent to 10% of the sale price paid by them is more than the credit taken on inputs used in the manufacture of exempted goods. He submitted in this connection, a certificate from Cost Accountant was submitted before the adjudicating authority but the Commissioner has not given any finding on the Cost Accountant's certificate filed before hi. The learned Advocate also submitted that the assessee have exported the generators of capacity of 1000 KV and 1250 KV and the proceedings to deny the credit in respect of inputs used in the manufacture ....
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.... used in the manufacture of windmill generators as the assessee has started the manufacture of dutiable windmill generators from May, 2006. This finding of the Commissioner is not proper and legal. He submitted that the adjudicating authority has drawn the conclusion based on the submissions of the assessee, which was verified at the buyer's factory by deputing the Central Excise officer as discussed in para 25 of the Order-in-Original and this conclusion is not proper and cannot be considered as having any evidential value and bearing in the instant case as it is for the assessee to produce the documentary evidence in support of his defence and discharge the allegation in the show-cause notice and it is incumbent upon the adjudicating authority to consider such evidences as produced by the assessee. In the instant case, the adjudicating authority was not satisfied with the submission and documentary evidence produced by the assessee so far as the question of findings to determine all the goods used in the manufacture of the exempted goods and the adjudicating authority directed for investigation to be done at the buyers end to know the dimension of such inputs. He further pointed ....
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....the stator housings and end shields in the manufacture of 4 dutiable motors of 600KV supplied to M/s Shakti Sugar Mills, Madurai. The use of said inputs was got verified by the Commissioner by deputing officer to the said Sugar Mills. Revenue has stated that the verification done at the buyer's factory is not proper and cannot be considered as having any evidential value particularly when the Commissioner himself was not satisfied with these contentions of the assessee and that is why the Commissioner directed for further verification done is vague as the machine has not been dismantled and report was submitted by the officer on the basis of photograph of the machine. 11. We have gone through para 25 of the Order-in-Original. It is stated in the order that "the use of said stator housings and end shields in the manufacture of 660KV motor was verified by deputing the Central Excise officer from Belapur Division office to the Shakthi Sugar Mills and he has confirmed the assessee's contention." There is another finding by the Commissioner based on assessee's quotation dated 2.5.2006 placed on M/s Shakthi Sugar Mills and a purchase order dated 15.5.2006 for four sets of 660KV dutiab....
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....volved on inputs used in manufacture of export goods. 14. There is another submission of the assessee that the generators of 1000 KV and 1250 KV have been cleared by them reversing the credit equal to the amount of 8%/10% of price of exempted goods during the relevant period. It is their contention that the said reversal is in excess of total CENVAT Credit taken by them on all inputs used in the manufacture of exempted goods. To prove this fact, they have submitted a certificate from the Cost Accountant. According to them, the cost of all inputs used in 1250 KV generators is Rs.7,60,500/- and maximum of CENVAT Credit @ 16.32% comes to Rs.1,24,114/-. They submitted that they have reversed 10% of the price of generator which is Rs.13,40,000/- i.e. Rs.1,34,000/-, which is more that the total CENVAT Credit on all inputs including the disputed inputs. 14. We find that the dispute relates to two inputs i.e. end shields and stator housings. From the certificate submitted by the Cost Accountant, the cost of these two inputs can be ascertained. The total duty attributable to these two inputs out of Rs.1,34,000/- can be ascertained by multiplying Rs.1,34,000/- by the ratio of the cost ....