2015 (11) TMI 664

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.... appellant cleared wind mill on nill rate of duty by claiming exemption under notification No. 6/2006-CE dated 01.03.2006 during the period Oct 2008 to March 2009. The appellant is also availing Cenvat Credit on input / input services and is not maintaining separate account for inputs for manufacturing dutiable as well as exempted final product and also not paying amount equal to 10% of the value of the exempted goods at the time of clearance. An audit took place at the premises of the appellant. Audit pointed out the discrepancies and immediately on pointing out by the audit the appellant paid 10% of the value of exempted goods along with interest. Thereafter, a show cause notice was issued on 29.09.2010 by invoking extended period of limi....

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....4) STR 461 (Tri-Del). 3. On the other hand Ld. AR drew my attention to the para 5 of show cause notice wherein it has been alleged that appellant has placed the fact of availment of Cenvat Credit which was used in manufacturing of both dutiable as well as exempted final product. Merely writing letter that they are claiming exemption does not mean that appellant is not maintaining separate account for inputs and also availing Cenvat Credit on the inputs for manufacturing of dutiable as well as exempted goods. Therefore, penalty is rightly imposed on the appellant being suppressed the facts. She further submits that Rule 6 is clear that if appellant is manufacturing dutiable as well as exempted final product then either they are required t....

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....n are not applicable. Consequently, penalty under Rule 15 of the Cenvat Credit Rules 2004 is also not imposable. Further, in the case of Eastern Medikit Ltd. (Supra) this Tribunal has examined the issue and observed in para 3 as under: "I have carefully considered the submissions from both the sides and perused the records. The appellant have taken Cenvat Credit in respect of common inputs which were used in manufacture of dutiable as well as exempted finished products and it is also not in dispute that separate record and separate inventory of the inputs used in the manufacture of dutiable and exempted finished products had not maintained. Though the appellant plead that they have not taken Cenvat Credit in respect of inputs going....

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....edit. Rule 12 of the Cenvat Credit Rules provide that where the Cenvat Credit has been taken or utilized wrongly or erroneously refunded the provisions of the Section 11A or 11B shall apply mutatis mutandis for such recovery. Neither Explanation-II to Rule 693) refers to Rule 13 for imposition of penalty if the manufacturer does not pay the amount due under this sub-rule nor Rule 13 provides for penalty in this regard. In view of these circumstances, following the Tribunals judgment in the case of Sangrur Agro Ltd. (Supra), I hold that no penalty is imposable on the appellant under Section 11 AC and as such the impugned order upholding the penalty on the Appellant under section 11AC is not sustainable. The impugned order, therefore, is set....