TaxTMI 
TaxTMI 
2013 (9) TMI 91
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....ations are in brief, as under :- 2.1 The Appellants are manufacturer of Zinc Sulphate (Agriculture Grade) as well as Zinc ingots from Zinc Skimmings imported by them. The imported Zinc Skimming containing Zinc ash and Zinc Metal is subjected to pulverizing and segregation by which the metallic content and ash content are separated. The metallic content is further processed to make Zinc Ingots which being a dutiable item is cleared on payment of duty. The ash content is treated with sulphuric acid to make Zinc Sulphate (agricultural grade) which is duty free. In respect of imported Zinc Skimming, in addition to customs duty, additional customs duty is payable and according to the Department, during the period of dispute, the appellants we....
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.... 4. Shri N.K. Garg, Advocate, the learned Counsel for the appellants, pleaded that during the period from January, 2008 to April, 2008, neither any additional Customs duty had been paid in respect of imported Zinc Skimmings nor any Cenvat credit had been taken and hence the question of payment of 10% amount does not arise, that for January, 2008 to April, 2008 period, only Special Additional Customs Duty (SAD) had been paid on imported Zinc Skimming but its Cenvat credit was not taken, that service tax credit initially taken in respect of GTA Service and Customs House Agents Services was also reversed subsequently, that the demand attributable to January, 2008 to April, 2008 in case of M/s. Bhoomi Sudhar Chemicals Industries is Rs. 43,41,46....
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....d for May, 2008 to June, 2009 period is more than the amount demanded under Rule 6(3), that the appellants have strong prima-facie case in their favour and that in view of this the requirement of pre-deposit of the amount demanded, interest and penalty may be waived for hearing of these appeals. 5. Shri R.K. Varma, ld. DR opposed the Stay Application by reiterating the findings of Commissioner (Appeals) in the impugned order and emphasized that since the appellants have failed to maintain separate account and inventory of inputs meant for use in the manufacture of dutiable final products and exempted final product, the provisions of Rule 6(3)(b)/6(3)(i) would be attracted and the appellant would be liable to pay an amount of 10% of the v....
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....vely would not be sustainable. 7. The demands under Rule 6(3)(b)/6(3)(i) of Cenvat Credit Rules, 2004 for May, 2008 to June, 2009 against M/s. Bhoomi Sudhar Chemical Industries and M/s. Ganesh Agro are Rs. 40,24,020/- and Rs. 41,00,691/- respectively. For this period, as mentioned in para 3(iii) of both the Show Cause Notices, the Appellants were determining the proportionate amount of Cenvat credit in respect of the Zinc Ash used in the manufacture of exempted goods Zinc Sulphate (agricultural grade) by multiplying the total Cenvat credit available in respect of the quantity of Zinc Skimming taken up for manufacture by the ratio of the value of Zinc ash portion of Zinc Skimming to the value total quantity of Zinc Skimming and the propor....
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...., he cannot do so, as it is impossible. In this case, it would be impossible for the Appellant to maintain separate account and inventory of Zinc Skimming meant for use in the manufacture of Zinc Sulphate and the Zinc Skimming meant for use in the manufacture of Zinc Ingots. Lex Non Cogit ad impossibilia - Law does not compel a person to do that which is impossible, is a well settled legal principle applied even in taxation matters. Hon'ble Allahabad High Court in case of Commissioner of Income Tax v. Premkumar reported in 2008 (214) CTR 452 (All.) while dealing with the question whether an assessee can be faulted for not declaring the amount of capital goods on acquisition of land when the amount of compensation itself is not determined, h....
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....alcium also emerged, observing that when there is an impracticability of maintenance of account and the exercise of option for maintaining separate account and inventory of the inputs for dutiable and exempted final product was inconceivable, levy of 8% of the value of Di-Calcium phosphate is unwarranted (para 17 of the order). Same view has been taken by Hon'ble Bombay High Court in case of Rallis India Ltd. v. UOI reported in 2009 (233) E.L.T. 301 (Bom.) and by Hon'ble Gujarat High Court in the case of CCE, Vadodara-I v. Sterling Gelatin reported in 2011 (270) E.L.T. 200 (Guj.). 8.1 In view of the above discussion, we are of prima facie view that since in this case, it is impossible for the Appellants to maintain separate account and i....