2015 (4) TMI 958

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....both, excisable and exempted final products, but the inputs namely Diethyl Carbanyl Chloride were used exclusively in the manufacture of exempted final product. A show cause notice dated 04.10.2006 was issued proposing to deny credit of Rs. 29,26,632/- alongwith interest and penalty on the inputs Diethyl Carbanyl Chloride used exclusively for the manufacture of finished goods i.e. Diethyl Carbamazine Citrate (DECC), during the period from September 2001 to August 2004, as per the provisions of Rule 6 of the Cenvat Credit Rules 2001, 2002/2004. The Adjudicating authority confirmed the demand of Rs. 29,26,632/- alongwith interest and appropriated an amount of Rs. 8 Lakh, as deposited during the investigation. He has also imposed penalty of eq....

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.... Hyderabad 2007 (215) ELT 81 (Tri. Bang.) has categorically observed that Explanation III in Rule 6 (3) of the Cenvat Credit Rules, 2004 would be applicable prospectively and the present case is prior to the insertion of Explanation III. He further submits that the Tribunal has taken a consistent view that the compliance with the Rule 6 (3) relates to the entirety of inputs used in the exempted final products including common inputs used in the manufacture of dutiable and exempted final product. He relied upon the following decisions:- (a) Aurobindo Pharma Limited vs. CCE, Hyderabad 2007 (215) ELT 81 (Tri. Bang.). (b) Hetero Labs Limited vs. CCE, Hyderabad 2005 (192) ELT 716 (Tri. Bang.) (c) Bonfigilioli Transmissions Pvt. Limited ....

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....anything inconsistent with the CENVAT scheme of allowing credit of duty paid on inputs that go into production of goods or services that suffer duty so that there is no cascading effect of goods or services having to suffer double taxation. A position that informed the legislative policy all along is reiterated by expressly denying credit where the final products or services are not subject to tax. We note that the Explanation has been issued for the removal of doubts. The Explanation is in the nature of a clarification and so applies retrospectively. Exceptions to the Rule 3 are specified in sub-rule (6) of Rule 6 of CCR. Therefore an assessee which uses inputs exclusively for the manufacture of exempted goods and services but makes cleara....