TaxTMI 
TaxTMI 
2015 (9) TMI 776
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....Rules, 2004 be extended to the party when option to avail a particular provision as required under Rule 6(3)(A)(a) of Cenvat Credit Rules, 2004 has not been exercised by the party. 3. Learned counsel for the appellant submits that the Tribunal has grossly erred in allowing the benefit of Rule 6(3) of the Cenvat Credit Rules, 2004 to the respondent and also in imposing costs of Rs. 10,000/- on the adjudicating authority. 4. Learned counsel for the respondent submits that the impugned order passed by the Tribunal does not suffer from any infirmity. He also refers to the earlier order passed by the Tribunal and the directions contained therein. 5. We have carefully considered the submissions of the learned counsel for the parties and perused the record. 6. Briefly stated, the facts of the present case are that a show cause notice dated 19th March, 2010 was issued by the appellant to the respondent-assessee demanding Central Excise Duty of Rs. 2,08,96,245/- on the ground that the assessee had not maintained separate inventory/ accounts of raw material and input services used in the manufacture of dutiable/ exempted glass and glassware and thus, contravened the provisions of Rule 6(....
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....period from 01.04.2009 to 31.03.2010 amounting to Rs. 95,51,744/-. 9. Being aggrieved, the respondent assessee filed an Appeal No.2257 of 2011 before the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi, which was allowed by Final Order No.A/346/2012-EX(BR) dated 27.02.2012 observing/ directing as under: "10. As per the provisions of Section 73(3) of Finance Act, 2010, if the Commissioner finds that the credit reversed by the assessee is not correctly reversed, the only option available to the Commissioner is to calculate it correctly and then ask them to reverse the correct amount. It goes without saying that before adopting the above manner of calculation, he has to give reasons as to why he considers that the calculation given by the assessee is not proper and he has to disclose the method he is going to adopt to the assessee so that the assessee can make submissions as to why the calculation adopted by him may or may not be justified. After the retrospective amendment made by Section 73 of Finance Act, 2010, there is no scope for demanding the assessee to pay 10%/ 5% of the value of the exempted product. Prima facie, we are convinced that the as....
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.... dated 12.12.2013, the Commissioner in paragraph-8.2 noted various submissions of the assessee, but conveniently and deliberately did not consider the submissions made in clauses (iii), (iv), (v), (ix) and (xiii), which are reproduced below: "(iii) During the relevant period (April 2008 to September 2009), They had been availing CENVAT credit on aforesaid inputs/ input services. However, to ensure the compliance of provisions of Rule 6 of the CCE, 2004, they had been maintaining separate account for receipt, consumption, inventory of duty paid inputs meant for use in manufacture of dutiable final products and the quantity of inputs meant for use for manufacture of exempted goods. (iv) They had been taking CENVAT credit of that part of input or input service, which had been used for manufacture of dutiable final products only. No CENVAT credit has been taken on the input/ input services, which were used in manufacture of exempted goods. (v) During the period from April, 2008 to September, 2009, they had availed credit of Rs. 23,20,811/- and did not avail credit of Rs. 55,50,508/- on CENVATable inputs/ input services. Item wise chart was also enclosed. (ix) In the defence rep....
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....ual to 5%/10% of the value of the exempted goods cleared by him. However, w.e.f. 1.4.2008, such a manufacturer was given an additional option, which was to pay an amount equal to cenvat credit involved on the inputs/or input services used in or in relation to the manufacture of exempted final products and this amount was to be determined subject to the conditions and the procedure prescribed in sub-rule ( 3A ) of Rule 6. By Finance Act, 2010, a retrospective amendment was made to Rule 6 of Cenvat Credit Rules, 2004 and the option of reversing the actual credit by a manufacturer using common cenvat credit availed inputs/input services for manufacture of dutiable as well as exempted final products become applicable w.e.f. 10.09.2004. In this case, the department's allegation is that the appellant had not maintained separate account and inventory of the inputs and input services used in or in relation to the manufacture of dutiable and exempted final products and on this basis, demand of Rs. 95,51,744 /- has been confirmed on the basis of 5%/10% of the value of the exempted final products cleared during the period 1.4.2008 to March, 2010. However, the Tribunal vide Final Order dat....
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.... the Commissioner in the de novo proceedings could not have ordered determination of quantum of demand under Rule 6(3)( i ) on the basis of 5%/10% of the sale value of the exempted final products and could not have decided to impose penalty of equal amount. 12. The Commissioner's reasoning for confirming the demand on the basis of Rule 6(3)( i ) i.e. on the basis of 5%/10% of the sale value of the exempted final products is that- (a) retrospective amendment by Section 73 of the Finance Act, 2010 is not applicable for period beyond 31.03.2008; and (b) the benefit of amendment to Rule 6(3) by notification no. 10 /08-CE(NT) dated 1.3.2008 is not applicable for availing the option as per clause (ii) of Rule 6(3) of reversing the cenvat credit attributable to input/input services used in or in relation to manufacture and clearance of exempted goods as far this purpose a written option is required to be given to the jurisdictional Superintendent of Central Excise in terms of Rule 6( 3A ) and in this case, no such option given by the assessee is on record. However, while giving the above findings, the Commissioner has maintained total silence on the pleas of the Appellant, as ....
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....No.719 /2012-EX dated 11.06.2012. To repeat, in the de novo adjudication proceedings, which will be the third round of adjudication by the Commissioner, the Commissioner must requantify the cenvat credit to be reversed on proportionate basis for the period from 1.4.2008 to August, 2009 strictly as per the Tribunal's order i.e under Rule 6(3) (ii) read with the formula prescribed in Rule ( 3A ) and in this regard, the Commissioner shall consider the Appellant's plea that they, during this period, have not taken the credit in proportion to the inputs/input services used in on in relation to manufacture of exempted final products and also the reports of Asstt. Commissioner of Central Excise, Agra to Asstt. Commissioner (Adjudication) on this issue. In view of the Tribunal's final order dated 27.12.2012, the Commissioner cannot once again go into the question of applicability of the provisions of Rule 6(3)(ii). Since the Tribunal had set aside the penalty, in de novo proceedings, the Commissioner cannot decide to impose the penalty again. 14. The conduct of the Commissioner in passing the impugned order, which was in course of de-novo proceedings in pursuance of the Tribu....
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.... acts as a deterrent to the frequent requests for adjournment, it also compensates the other party for inconvenience caused by adjournment. In our view this principle though in the context of frequent requests for adjournment will apply in a case where the commissioner defying the Tribunal's directing and ignoring the provisions of law passes an order which should never have been passed and thereby forcing the assessee to file appeal before the Tribunal. Accordingly, a Cost of Rs. 10,000/- (Rupees ten thousand only) is imposed on the Respondent Commissioner which is to be paid by the Commissioner who has adjudicated this matter. The amount of cost is to be paid to the Registry of the Tribunal within four weeks of the date of this order. The registry is directed to send a copy of this order to the Chairman, Central Board of Excise & Customs for his information." 14. The aforesaid impugned order of the Tribunal has been challenged by the appellant in the present appeal on the following grounds as per memorandum of appeal: "1. That the Hon'ble CESTAT in the Final Order dated 09.02.2015 has grossly erred in holding that the benefit of Section 73 of the Finance Act, 2010 shal....
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....ot always sufficient and it depended upon the fact and circumstances of each case. In the instant case, it is an indisputed fact that the condition of exercising the option to avail the provisions of rule 6(3)(i) & (ii) of Cenvat Credit Rules, 2004 is the only condition required to be followed by the statutes and by not exercising the option by the party, the department is deprived of the right of exercising necessary checks. The issue have been taken by the five member bench of the Apex Court in the case of M/s Hari Chand Shri Gopal and Ors Vs UOI [2010(260)ELT 0003(S.C.)] in which theory of substantial compliance has not been held to be sufficient to grant the benefit of exemption. Further, Hon'ble Apex Court in the case of M/s Indian Aluminium Co. Ltd. Vs Thane Municipal Corporation [119 (55) ELT 454 (SC)] has also held the same. 6. The order passed by the CESTAT in Para 14 of the Final Order dated 09.02.2015, including imposition of costs for Rs. 10,000/- on the adjudicating authority does not appear to be legal and proper in view of the facts and legal position narrated above and thus in view of the aforesaid facts and circumstances the order of the Hon'ble CESTAT se....
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...., Agra and the report sent by AC, Agra to AC (Adjudication), Headquarters office, Kanpur, according to which during 2008-2009 and 2009-2010, the credit not taken in respect of inputs/input services used in or in relation to manufacture of exempted final products was more than the credit required to be reversed in terms of the formula of sub-rule ( 3A ) of Rule 6. If this is correct, there was absolutely no need to initiate the proceedings under Rule 6(3). We also fail to understand as to why the Range Superintendent's report which had been forwarded to AC (Adjudication) by AC, Agra vide his letter dated 30.08.2013 has been totally ignored by the Commissioner in her order dated 12.12.2013. (vi) Even if no option has been given for reversal of cenvat credit in terms of Rule 6(3)(ii), merely on this ground the provisions of Rule 6(3)( i ) can not be forced upon the assessee when the assesse claim has been that during 2008-09 and 2009-10 period, they had not taken cenvat credit in proportion to the use of inputs/input services in relation to manufacture of exempted final products. (vii) In any case, when this issue had been decided by the Tribunal in the remand order and Tribun....
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....quires that Court to accept that judgment, and it should not in collateral proceedings write a judgment contrary to the confirmed judgment. 20. In the case of Kishore Samrite Vs. State of Uttar Pradesh and others, (2013) 2 SCC 398 (para-29), Hon'ble Supreme Court held that judicial discipline and propriety are the two significant facets of administration of justice. Every court is obliged to adhere to these principles to ensure hierarchical discipline on the one hand and proper dispensation of justice on the other. 21. In the case of RBF RIG Corporation, Mumbai Vs. Commissioner of Customs (Imports), Mumbai, (2011) 3 SCC 573 (para-25), Hon'ble Supreme Court laid down the law that if for any reason, the subordinate authority is of the view that the directions issued by the Court are contrary to statutory provision or well established principles of law, it can approach the same Court with necessary application/petition for clarification or modification or approach the superior forum for appropriate reliefs. We may note here that in the present case, as we have already noticed, the appellants have not questioned the final order of the Tribunal dated 27.02.2012, which order ha....