TaxTMI 
TaxTMI 
2015 (12) TMI 1051
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....gaged in the processing of manmade textile fabrics falling under sub-heading of Chapter 54 & 55 of the First Schedule to the Central Excise Tariff Act, 1985. The main raw material for processing is grey fabrics, which also falls under Chapter 54 and 55 of CETA. The appellant availed cenvat credit of duty paid on grey fabrics in terms of Rule 3 of Cenvat Credit Rules, 2004 and maintained prescribed records in respect of such availment and utilization of cenvat credit. The appellant processed grey fabrics on job work basis and also on its own. Vide Notification No. 29/2004-CE dated 9.7.2004, a concessional rate of duty has been prescribed for manmade textile fabrics falling under Chapter 54 and 55 if the manufacturer availed the benefit of ce....
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....allegations. Thereafter the adjudicating authority vide its order dated 30.8.2006 passed ex parte order confirming the entire demand towards cenvat credit raised in both the show cause notices by separate orders and also imposed a penalty of Rs. 20,000/- on the appellant. Thereafter the appellant filed separate appeals before the Commissioner (Appeals) who directed the appellant to deposit the entire amount of Rs. 6,93,083/- relating to both the cases. The appellant failed to deposit the same and the Commissioner (Appeals) dismissed the appeals for non-compliance of his order and thereafter the appellant filed appeals before the CESTAT which directed the appellant to deposit 50% of the total demand and set aside the order of the Commissione....
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....final products and exempted products. He further submitted that the impugned order failed to explain as to which type of separate accounts are contemplated under Rule 6(2) which the appellant failed to maintain. He also submitted that denial and recovery of cenvat credit is against the instructions/clarification issued by the Board vide Circular No.703/19/2003-CX dated 25.3.2003 for the textile industry. These instructions/clarification are binding on the department and the Revenue cannot be allowed to argue against it. The observation of the adjudicating authority that these instructions cannot override the specific requirements of Rule 6(2) of the Cenvat Credit Rules, 2002 is not only improper and unjustified but also illegal. He also sub....
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....f inputs and availment and utilization of cenvat credit. Here it is pertinent to mention the circular issued by the Board vide Circular No.703/19/2003-CX dated 25.3.2003 issued in the wake of revamping of central excise duty structure for textile industry by Finance Budget 2003. The relevant extract of the circular pertaining to the case is reproduced herein:- "(h) Processors who undertake job work and also do processing on their own and obtain dye and chemicals under invoice issued in his name, can take credit of duty paid on such dyes and chemicals to pay duty on his dutiable clearances, even though some of these inputs were used for making goods cleared without payment of duty under the job work scheme. 2. The purpose o....
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....icient compliance of Rule 6(2) of the Cenvat Credit Rules. Further, it support of their submissions, the appellant relied upon the judgment in the case of Foods, Fats & Fertilisers Ltd. vs. CCE, Guntur reported in 2011 (22) STR 484 (Tri.-Bang.), wherein the Tribunal has observed as under:- "8. The main allegation is that they did not maintain separate accounts for receipt, consumption and inventory of the inputs as prescribed in the Cenvat Credit Rules, 2002/2004. It is seen that the appellants had not taken entire credit on the duty paid on the inputs used in dutiable and exempted products. It is on record that they had availed credit on pro-rata basis. In other words, the credit has been taken only in resp....