TaxTMI 
TaxTMI 
2014 (6) TMI 720
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....us application are the same, these are taken up together for disposal through this common order. 3.1 Briefly stated the facts of the case according to Revenue are that M/s Swiss Parenterals Private Limited, appellants in Appeal No. E/ 260/ 2007 and Appeal No. E/ 449/ 2011, engaged in the manufacture of dutiable as well as exempted medicaments, falling under Chapter 30 of the Schedule to the Central Excise Tariff Act 1985, by availing credit of duty paid on inputs in terms of Central Excise Rules 1944, CENVAT Credit Rules 2001/ 2002/ 2004, but did not maintain separate inventory of inputs used in the manufacture of exempted and dutiable medicaments. The Joint Commissioner, Central Excise, Ahmedabad-II issued show cause notice dated 26.09.2005 to the appellant proposing imposition of penalty, interest, and recovery of an amount of Rs. 10,41,840/- @ 8% of the price of exempted medicaments cleared during the period 2000-01 to 2003-04 as per the provisions of Rule 57CC of the Central Excise Rules 1944, Rule 6 of the CENVAT Credit Rules 2001/2002. Another show cause notice dated 01.12.2005 on the same grounds for the period from November, 2000 to March, 2005 for recovery of amount of Rs....
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....s follows: (i) That both the show cause notices invoked extended period and are on the same ground. The second show cause notice covers the period from November 2000 to March 2004 already covered by the first show cause notice and also includes subsequent period of one year. He submitted that for the same period, on the same ground and the same cause of action, two separate show cause notices cannot be issued and the subsequent show cause notice would not be maintainable in law. In this respect, he cited the following case laws: (a) Nizam Sugar Factory Vs. Collector of Central Excise, A.P. - [2008 (9) STR 314 (S.C.)]; (b) Osaka Alloys & Steel Pvt. Limited - [2005 (192) ELT1197 (Tri. Del.)]; (c) Commissioner of Central Excise Vs. Osaka Alloys and Steel Pvt. Limited - [2007 (211) ELT 543 (P&H)]; (d) Commissioner of Central Excise Vs. Osaka Alloys and Steel Pvt. Ltd. - [2008 (221) ELT A150 (S.C.)]; (e) Metal Extruders India Pvt. Ltd. Vs. Union of India - [1994 (69) ELT 477 (Bom.)]; (f) Commissioner of C. Ex., Indore Vs. Sidharth Tubes Ltd. - [2004 (170) ELT 331 (Tri. Del.)]; and (g) Shreeji Colourchem Industries Vs. Commissioner of Central Excise, Vadodara - 2013 (294) ELT 615....
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....based on the evidence available on record. He argued that the appellant has failed to prove as to how much credit was attributable to inputs used in or in relation to the manufacture of exempted medicaments during the material period. Therefore, the Commissioner has correctly confirmed the demand of excise duty of Rs. 88,41,543/- along with interest and imposed penalty of equivalent amount. (ii) That the Order No. Section 68 to 72/ F.A./ COMMISSIONER/ 03/ 2010 dated 28.12.2010 passed by the Commissioner of Central Excise, Ahmedabad-II was not maintainable as the assessee had not complied with the provisions of sub-section (3) of sections 70 to 73 of the Finance Act, 2010 [subject matter of Revenues Appeal No. E/ 444/ 2011]. 6. Heard both sides and perused the records. The issues to be decided by us are: (i) Whether subsequent show cause notice dated 01.12.2005, issued by the Revenue covering the period from November 2000 to 31.03.2005, is maintainable when an earlier show cause notice dated 26.09.2005 on the same grounds covering the period from 2000-01 to 31.03.2004 had been issued by the Revenue but not adjudicated. (ii) Whether subsequent reversal of credit attributable to ....
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....n of fact on the part of the assessee so as to saddle with the liability of duty for the larger period by invoking proviso to Section 11A of the Act. So far as the assessee is concerned, it has all along been contending that they were not related persons, so, it cannot be said to be guilty of not filling up the declaration in the prescribed proforma indicating related persons. The necessary facts had been brought to the notice of the authorities at different intervals from 1985 to 1988 and further, they had dropped the proceedings accepting that M/s. Pharmachem Distributors was not a related person. It is, therefore, futile to contend that there has been suppression of fact in regard M/s. Pharmachem Distributors being a related person. On that score, we are unable to uphold the invoking of the proviso to Section 11A of the Act for making the demand for the extended period. This judgment was followed by this Court in the case of ECE Industries Limited v. Commissioner of Central Excise, New Delhi reported in (2004) 13 SCC 719 = 2004 (164) E.L.T. 236 (S.C.). In para 4, it was observed : 4. In the case of M/s. P&B Pharmaceuticals....
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....not be issued by the Revenue. 7.2 On the second issue at Para 6(ii), we note that in the case of Commissioner of Central Excise Vs. Himalaya Drug Company (supra), the Hon'ble High Court of Karnataka has held as under: 5. From the material on record it is clear that even though the assessee initially took credit of the common inputs used in the manufacture of both dutiable and exempted goods they have reversed the credit availed on the inputs used in the manufacture of exempted final products. 6. The learned counsel appearing for the respondent points out that the amendment carried out from time to time provides for payment of 8% duty on the inputs used for exempted goods and therefore he contends that when once the assessee had availed CENVAT credit and after the amount of the value of the goods used for exempted goods if ascertained it is clear that they have reversed the credit entry only in so far as the goods used for manufacturing exempted goods. Therefore they submitted that the contentions of the revenue that merely because the assessee has not maintained separate accou....
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.... of receipt of the communication from the department. 5. The appellant has produced relevant extracts from the relevant Rule of Cenvat Credit Rules, 2002 which relates to obligation of manufacturer of dutiable and exempted products. Under sub-rule (2) of the said Rules, a manufacturer is required to maintain separate accounts regarding inputs used for manufacturing of dutiable products and inputs used for manufacturing of exempted products. However, sub-rule (3) stipulates that, in a case where the manufacturer opts not to maintain separate accounts, the manufacturer shall follow either condition (a) or condition (b), as the case may be. Under the Rule, Explanation-I provides that the amount mentioned in any of the conditions shall be paid by the manufacturer by debiting the Cenvat credit or otherwise. 6. Thus, in effect, the directions issued by the Tribunal are merely in consonance with the requirement of the relevant rule, and it is not possible to state that the Tribunal has committed any error in issuing such directions. The respondent-assessee having accepted before the Tribunal to reverse the Cenvat credit as recorded by the....
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.... 370 of the appeal papers of Appeal No. E/ 449/ 2011 showing receipt of exempted input (Alpha Beta Arteether) of value of about three crore rupees during the material period, for which no CENVAT Credit could be taken. In view of these facts on record, we find that the method adopted by the adjudicating authority for working out of the demand of Rs. 88,41,543/-, on the basis of 8% or 10% of the sale price of dutiable and exempted final products, is not maintainable. We, therefore, remand the matter to the adjudicating authority for proper verification of appellants claim of reversal of CENVAT Credit on inputs attributable to manufacture of exempted final products on the basis of appellants records after affording opportunity to the appellant to explain their case before deciding the issue of quantum of CENVAT credit in remand proceedings. 8. On the third issue at Para 6(iii) regarding maintainability of Appeal No. E/ 449/ 2011, filed by the assessee, and Appeal No. E/ 444/ 2011, filed by the Revenue, we note that the Government had offered a one time opportunity to the manufacturers to enable them to pay an amount equivalent to CENVAT Credit attributable to inputs used in, or in ....