TaxTMI 
TaxTMI 
2014 (7) TMI 311
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....e concerned they clear at concessional rate of duty of 8%+2%+1% by availing benefit of Exemption Notification No.5/2006-CX dt.1.3.2006. The Notification stipulates that, in order to avail concessional rate of duty, the assessee (i) shall not avail the credit on inputs and (ii) shall not use the electricity in firing the Kiln. It was observed that, the assessee has fulfilled both of the conditions and hence eligible for the benefit of notification and the transactions are found to be in order. 3. As far as "Flat Bed Screens" are concerned, they are (i) clearing at nil rate of duty to their sister units for further use in the manufact....
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....ection was treated as closed on 18.8.2008. 7. In view of all the foregoing facts, the present status is that, the assessee is manufacturing and clearing, (i) Glazed Tiles on payment of concessional rate of duty at 8%+2%+I% (Notn.No.5/06 dt.1.3.2006), and (ii) Flat Bed Screens at nil rate of duty (Notn.No.30/2004 dt.9.7.2004) 8. In a nut shell, the activities of the assessee can be summarized as under; (i) Manufactures and clears Dutiable as well as Exempted goods; (ii)Does not avail credit on inputs, but avails credit on capital goods and inp....
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....services used in or in relation to the exempted goods subject to the conditions; that the assessee shall follow the procedure stipulated under Sub-Rule 6(3) (A) of CCR 2004. 10. In the instant case, it is observed that, the assessee is availing credit on input services like (i) Man Power Recruitment services (ii) security Services (iii) Erection and Commissioning (iv) Consultant Services (v) Telephones (vi) Canteen Services etc. These servi....
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....re under Rule 6(3) (ii). It observed that, the assessee even though exercised an option to follow the procedure as laid down under Sub-Rule (ii) under Rule 6 of CCR 2004, has not paid any amount so far, which is to be recovered from them along with Interest. 13. Thereafter proceedings were initiated by issuing a show-cause notice on 27/05/2009 proposing to deny proportionate CENVAT credit availed in respect of exempted products on input services which resulted in confirmation of demand of Rs. 2,04,370/- towards ineligible CENVAT credit with interest and imposition of penalty of Rs. 10,000/-. 14. The learned counsel submits that the proportionate credit has been denied on the ground that the appellant has utilized the input services fo....
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....ble to the situation here and in view of the provisions of Rule 6, the appellant would not have availed the benefit of credit of service tax paid on input services in respect exempted products. 16. I have considered the submissions made by both the sides. As regards application of explanation to Rule 3(7) of CCR, I find that the rule is applicable. The rule would not have been applicable if the Notification was to provide that the exemption would be available if input service was mentioned in the notification. If there is an exemption available to a finished goods in spite of the fact that credit has been availed and if the notification specifically provides that CENVAT credit even if it is taken benefit would be available the provisions....
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.... the amount attributable to these services is Rs. 10, 361/-. I find that this submission is correct and therefore the payable amount to be demanded has to be reduced by this amount. 18. Finally, I have to consider whether extended period could have been invoked or not. The learned counsel submits that the very same issue had been under consideration of the Department and therefore the extended period could not have been invoked. However, I find that as found from the audit observation reproduced above, the earlier proceedings was relating to the issue as to whether the appellant was eligible for exemption even when credit of input service tax had been taken or not. The issue was not whether the appellant is required to reverse proportion....