2016 (7) TMI 1112

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....n the manufacture of exempted and dutiable goods, paying duty at applicable rates on dutiable goods, paying duty at applicable rates on dutiable goods and reversing/paying an amount equal to 10% of the value of the exempted goods as provided under Rule 6 (3) (b) of CENVAT Credit Rules. Department was of the view that appellant was using HR plates exclusively for manufacture of exempted goods and therefore contravened Rule 6 (1) of CCR, 2004 by availing credit on HR plates which were used for making exempted goods only. That appellants deliberately failed to maintain separate accounts for inputs/HR plates used in manufacture of exempted goods with intention to avail ineligible credit. A show cause notice was issued raising the above allegati....

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....empted category. That therefore appellant is not entitled to opt for procedure laid for use of common inputs as provided in Rule 6 (3) (b) of CENVAT Credit Rules, 2004. It is contended by the learned consultant that the inputs are used in manufacture of both exempted as well as dutiable MS Pipes and therefore department cannot say that appellant has to maintain separate accounts and that appellant cannot opt for Rule 6 (3) (b). He drew support from the following judgment: PSL Ltd. Vs CCE Pondichery [2007 (220) ELT 510 (Tri-Chennai)] Tahe Ali Indus & Projects (P) Ltd. Vs CCE, Hyderabad [2006 (195) ELT 225 (Tri Bang)] Heideberg Prominent Fluid Controls India (P) Ltd. Vs CCE & ST. Bangalore [2015 (321) ELT 282 (Tri-Bang)] 4. Ref....

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....e pipes are varying in size and specification. Therefore, it appears that the assesses have manufactured different verities of finished goods/MS Pipes during the different periods. Thus it is evident that MS pipes which are exempted from duty were manufactured and cleared during the particular periods". 7.  We do not find any conclusive evidence placed by department to establish that HR plates were not common inputs. In any case, HR plates are only one of the input for exempted goods. The other inputs like wire mesh, cement, electrodes were also common inputs. In such case the appellant has to either adhere to Rule 6 (2) of Rule 6 (3) (b) of CENVAT Credit Rules. The department cannot insist that the appellant has to maintain separat....