TaxTMI 
TaxTMI 
2013 (2) TMI 34
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....nput use in manufacturing of goods cleared under the said notification had not been reversed before utilisation? (2) Whether, in the facts and circumstances of the case, the learned CESTAT was right in law in remanding the matter with respect to duty demanded on handling charges recovered from the buyers to the commissioner for fresh adjudication? (3) Whether, in the facts and circumstances of the case, the respondent assessee is liable to pay penalty of Rs. 1,49,59,729.00 under Section 11AC of the Central Excise Act, 1944?" Though separate questions have been framed, the issue is common, namely, the action of the respondent in claiming the benefit of Exemption Notification No.29/2004 dated 9th July 2004 as well as Exemption Notification No.30/2004 also dated 9th July 2004. From the record it emerges that the respondent manufactures different yarns falling under Chapters 56, 52 and 55 of the Central Excise Tariff Act, 1985 for which it also holds central excise registration. The respondent avails of Cenvat Credit on the inputs used in manufacturing of such final product. Upon clearance of such final product under notification No.29/2004 and 30/2004 the assessee receives....
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....V. CCE, Thane reported in 2008 (232) ELT 37 (Tri.-LB). Law stands declared by the Larger Bench that in case of common inputs used in dutiable and exempted goods. If the credit in respect of inputs used in exempted goods stand reversed before removal of such goods, it will amount as if no credit has ever been availed. By applying the ratio of the above decision and in view of the accepted position, as recorded in the impugned order of Commissioner that such credit was reversed by the appellant, we find no justifiable reasons to deny the benefit of Notification No.30/94 and to confirm the duty. We accordingly set aside the confirmation of demand of duty and penalty imposed on the above count." At the outset, counsel for the assessee had raised the objection against entertaining this appeal in view of Question No.3 by the Revenue on the ground that such question had a direct bearing on the valuation of the goods for the purpose of collection of duty and therefore appeal would not lie before this Court. In response to such a contention, under the instructions, counsel for the revenue stated that he would not press such a question. Under the circumstances, we have heard learned couns....
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....as different is applicable in the present case. Counsel submitted that the stand of the revenue that such reversal of credit must be before utilisation of the input is not borne out from the language used in different notifications. In any case, Rule 6 itself came to be amended with retrospective effect wherein sub-rule (7) was added providing that notwithstanding anything contained in sub-rules (1), (2) and (3) a manufacturer availing Cenvat Credit in respect of any inputs or input services and manufacturing final products which are chargeable to duty and also other final products which are exempted goods, may pay an amount equivalent to Cenvat Credit attributable to the inputs or input services used in, or in relation to the manufacture of, exempted goods before or after the clearance of such goods. Having heard learned counsel for the parties, we are of the opinion that the present situation is squarely covered by the Division Bench decision of this Court in case of Ashima Dyecot Ltd. (supra). It is not in dispute that the respondent-assessee while utilising the inputs for manufacture of dutiable goods has reversed the credit to the extent such inputs were used for exempte....
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....5 (3) No.63/95-Central Excise, dated the 16th March, 1995, G.S.R. 255 (E), dated the 16th March, 1995; (4) No.64/95-Central Excise, dated the 16th March, 1995, G.S.R. 256 (E), dated the 16th March, 1995; the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs used in, or in relation to, the manufacture of such final products at the time of their clearance from the factory; or (b) if the exempted goods are other than those described in condition (a), the manufacturer shall pay an amount equal to eight per cent of the total price, excluding sales tax and other taxes, if any, pain on such goods, of the exempted final product charged by the manufacturer for the sale of such goods at the time of their clearance from the factory. Explanation I. The amount mentioned in conditions (a) and (b) shall be paid by the manufacturer by debiting the CENVAT credit or otherwise. Explanation II. If the manufacturer fails to pay the said amount, it shall be recovered along with interest in the same manner, as provided in rule 12, for recovery of CENVAT credit wrongly taken." We are conscious that period of duty involved in this case is between J....