TaxTMI 
TaxTMI 
2008 (4) TMI 744
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....he appellants to pay Rs. 84,61,157/-, Rs. 1,85,23,739/-, Rs. 2,15,94,748/-, the amounts demanded in the three show cause notices under Rule 12 of Cenvat Credit Rules, 2002 read with Section 11A of Central Excise Act, 1944. He also directed the appellants to pay interest thereon in terms of Rule 6 read with rule 12 of Cenvat Credit Rules, 2002 read with Section 11AB of Central Excise Act, 1944. The amount of Rs. 1,12,52,762/- which was credit reversed by the appellants at the time of clearance of the finished goods, was appropriated towards the sum due in terms of Rule 6 of Cenvat Credit Rules, 2002. 3. The issue involved in the instant appeal is whether the provisions of Rule 6 (3) (b) of the Cenvat Credit Rules, 2002 are applicable or n....
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....ed 16.10.2001; 2. 654/45/2002-CX dated 19.8.2002; 3. 739/55/2003-CX dated 28.8.2003; 4. 858/16/2007-CX dated 8.11.2007 6. The appellants relied upon the following case laws in support of their claim that if the credit taken on the inputs used in the manufacture of exempted goods is reversed before the clearance of the goods, they are not required to pay an amount equal to eight per cent of the price of such goods under Rule 6 (3) (b) ibid. 1. Dharamasi Morarjee Chemical Co. Ltd. vs. CCE, Jaipur reported in 2001 (44) RLT 441 (Tri-Mum); 2. Rochees Watches Ltd. vs. Commissioner of Customs, Jaipur reported in 2003 (152) ELT 420 (Tri-Del) 3. Tribunal's Final order no. A/328/WZB/2005/C.....
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....006 (206) ELT 380 (Tri-Del) While in the case laws referred to in para (a) to (c) it has been held that 8%/10% amount is not payable on the exempted final product, if the input credit taken in respect of exempted final product is reversed, in the case law reported in para (d), although a stay order, it has been held that Rule 57CC (9) of erstwhile Central Excise Rules, 1944 prescribing for maintenance of separate inventory has no provision for any reversal of credit. We note that most of the case laws, which have held that the reversal of credit will suffice in lieu of payment of 8%/10% amount, have relied upon the Supreme Court judgement in the case of Chandrapur Magnet Wires Pvt. Ltd. vs. CCE, Nagpur reported in 1996 (81) ELT 3 (SC) . ....
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....Chapter 27 of the said First Schedule used in the manufacture of fertilizer; (iv) tyres of a kind used on animal drawn vehicles or handcarts and their tubes, falling within Chapter 40 of the said First Schedule; (v) newsprint, in rolls or sheets, falling within heading No. 48.01 of the said First Schedule; (vi) final products falling within Chapters 50 to 63 of the said First Schedule, the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs used in, or in relation to, the manufacture of such final products at the time of their clearance from the factory; or (b) if the exempted goods are' other than those described in condition (a), t....
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....dit taken or availed under Rule 6 is not contemplated by the Cenvat Credit Rules, 2002. The contention that it is open to the assessee to reverse the credit of duty availed in respect of the inputs instead of paying an amount of 8% of sale price in terms of the principle laid down by the Supreme Court in Chandrapur Magnet case cited supra does not appear to be correct since the judgement of the Supreme Court in the case of Chandrapur Magnet was delivered in the context of Rule 57C of the erstwhile Central Excise Rules, 1944 when the provisions of Rule 57CC, 57AD of the erstwhile Central Excise rules, 1944 and rule 6 of the Cenvat Credit Rules, 2001/2002 were not in the statute book. Hence, the Supreme Court did not have the occasion to cons....
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.... common inputs used in the manufacture of dutiable and exempted products (except in the cases mentioned in the provisions contained in sub-rule (3) (a) has no option but to reverse 8% of the price of the exempted goods as per provisions of sub rule 3 (b) of the said rule. If the appellants have consciously chosen to disregard the clear and unambiguous provisions of Rule 6, which are not capable of two interpretations, they have done so at their own peril and they cannot plead clemency and mercy later on in the name of equity and pray for relieving them of the liability to pay 8% of the price of the exempted goods. There is no reason why the rigours of law should not be given effect to. 11. Since there are contrary views of the coordinate....