2012 (2) TMI 439

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....from their sugar section to distillery section for manufacture of rectified spirit. The duty paid on the clearances for the aforesaid purpose is availed as Cenvat credit in distillery section. The Appellants, however, were reversing Cenvat credit @ 10% of the sale price of non-dutiable products under Rule 6(3)(b) of the Credit Rules whereas it was observed by the Deptt. that they were required to reverse the same on actual proportionate basis. 2. Thus two show cause notices (SCN) dated 3-3-2008 and 18-3-2008 for demand of Rs. 2,60,909/- and Rs. 4,49,107/- along with interest and penalty, for the months of February, 2007 and March, 2007 respectively were issued to the appellants, which were adjudicated by the adjudicating authority vid....

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....ls) is impugned before the Tribunal. 4. I have heard Ms. Sukriti Das, ld. Advocate appearing for the appellants and Shri B.L. Soni, ld. DR appearing for the Revenue. 5. The challenge in the present appeal is only for confirmation of interest and penalty. As regards interest, Commissioner (Appeals) has referred to Explanation II appearing under Rule 6(3)(c) of Cenvat Credit Rules. For better appreciation, the same is reproduced below :- "Explanation-II - If the manufacturer or provider of output service fails to pay the said amount, it shall be recovered along with interest in the same manner, as provided in Rule 14, for recovery of CENVAT credit wrongly taken." 6. As is clear from above, the amount of credit required to b....