2015 (11) TMI 465

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....fact of the case is that appellant had cleared goods at NIL rate of duty to Dept of atomic energy under the provisions of Notification No. 10/97-CE dated 1/3/97. They availed Cenvat credit of the duty paid on account of input used in manufacture of both dutiable and exempted final product. Since they have not maintained separate account for inputs used in manufacture of dutiable final product and exempted product, they had debited 10% of the contract price of the goods (excluding tax) under the provisions of Rule 6(3)(b) of CCR, 2004. They had also collected the said amount from their customer. In the show cause notice, it was alleged by the department that extra charges of 10 % recovered from the customer had increased price of exempted fi....

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.... are on the basis that price of the exempted goods for the purpose of reversal of 10% should be inclusive of the 10% reversal which was collected from the customer. Therefore the issue in dispute is what should be the price for the purpose of reversal of 10% under Rule 6(3)(b). He submits that goods were supplied to the Government Department of Atomic Energy under particular contract. As per the contract documents, he referred the price which is fixed under the contract and said price is inclusive of 10% reversal under Rule 6(3)(b) and the same contract also has terms which also shows that the reversal of Cenvat on exempted goods shall be paid towards said reversal against documentary evidence. As per this terms of contract, the price is no....

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....nt Department of Atomic Energy and the contract clearly shows terms of 10% reversal and payment and reimbursement thereof and also the contract price. Since goods were cleared under exempted Notification No. 10/97-CE, as per the condition of exemption certificate required to be submitted to the department. They have undisputedly produced such exemption certificate to the Jurisdictional superintendent vide their letter dated 8/10/2004. The said exemption certificate bearing number of purchase order under which, clause of 10% reversal and reimbursement thereby has been mentioned. He also submits that in the monthly returns they have explicitly declared the clearances of goods under this particular notification 10/97-CE. Even the show cause no....

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....hould be taken or price plus 10% reversal collected should be taken. I find from the contract documents that there is specific price fixed for sale of the goods and in that price there is no addition of this 10% in the form of the price. There is clause in the purchase order that against all the reversal of 10% customer shall pay the same amount to the appellant. In view of this fact contract price is the price and the same should be taken for calculation of 10% reversal required under 6(3)(b). As regard the 10% reversal made by the appellant and even though the same was collected from the customer the same was not retained by the appellant as the same was debited in their Cenvat credit account, therefore in this fact, it could not be said ....