2016 (3) TMI 99

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ation cess paid on the inputs used by them in the manufacture of tractors. The tractors manufactured by the appellants are exempted from payment of excise duty vide Notification No. 23/2004-CE dated 09/07/2004. However, a cess of 1/8% adv. is leviable in terms of notification issued under Industries (Development and Regulation) Act, 1951, in respect of tractors having engine capacity of above 1800 CC. Tractors having engine capacity less than 1800 CC are not liable to such cess. Appellants are engaged in manufacture of both type of tractors and were using common inputs without maintaining separate accounts for receipt and consumption of these inputs. Invoking the provisions of Rule 6 (3) (b) of Cenvat Credit Rules, 2004 proceedings were ini....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he tractors below 1800 CC. This fact has been admitted in the show cause notice issued by the Department. Such being the fact, there is no justification at all to demand 10% of amount on the value of tractors (below 1800 CC) invoking Rule 6 of the Cenvat Credit Rules. Learned Counsel relied on various case laws in support of his submission. He submitted that reversal of proportionate credit of educational cess attributable to the tractors of less than 1800 CC capacity is sufficient compliance of the conditions of Rule 6 and there could be no further liability on the appellant. 3. The learned AR Shri Govind Dixit reiterated the findings in the impugned order. He further submitted that the appellants did not maintain separate accounts as r....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n cess availed on inputs to discharge education cess on tractors of above 1800 CC. There is no industrial cess or education cess on the tractors of below 1800 CC. Accordingly they calculated the proportionate credit of education cess availed on common inputs and reversed the same. We find there is no dispute on the fact of such reversal which has been admitted in the show cause notice itself. In spite of such reversal, the appellants were called upon to pay an amount equal to 10% of the total price of exempted tractors invoking Rule 6 (3) (b) of the Cenvat Credit Rules, 2004. We find such a demand is not legally sustainable as already held in various decisions of this Tribunal and as affirmed by the Hon'ble Supreme Court. 5. The Hon'ble ....