TaxTMI 
TaxTMI 
2017 (1) TMI 650
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....activity does not fall within the ambit of manufacture, the goods produced by latter activity are subject to levy of duties of Central Excise. Though they had, initially, maintained separate sets of accounts for the two streams of production, logistical problems compelled them to avail the CENVAT credit on inputs used in common with the attendant obligation to discharge duty liability at 8% on exempt goods to comply with CENVAT Credit Rules, 2002. 2. However in May 2003, the assessee was directed to pay the difference between CENVAT credit taken on MS wire and the 8% paid by them on MS wire made out of duty-paid MS wire. Following issue of show cause notice, duty demand of Rs. 3,98,962 was confirmed under rule 12 of CENVAT Credit Rules, 20....
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....es (P) Ltd v. Commissioner of Central Excise, Rohtak [2012 (283) ELT 418 (Tri-Del)] was cited to show that designating as exempted follows from excisability. 6. Doubtlessly, drawal of thinner gauge products from MS wires is not manufacture and, in any case, the end product is not leviable to duty. The broader MS wires are procured from the market. The issue that arises is whether a product that is not covered by Central Excise Act, 1944 is exempt goods within the meaning of CENVAT Credit Rules, 2002. The said rule 2 stipulates that "(d) "exempted goods" means goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to "Nil" rate of duty;" 7. It is the claim of Learned Counsel ....
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....in the market stands on the same footing and cannot, in relation to those goods, seek to re-enter the value added chain. 9. The privilege that accompanies payment of specified tax or duty on exempted goods or services under CENVAT Credit Rules, 2004 is intended to ensure that convenience is afforded to manufacturers or service providers who may, owing to some exemption that they may not be interested in claiming, be, yet, compelled to implement administrative measures of separate accounts that are be too cumbersome. On non-excisable goods, the purchaser is not denied the option of paying duty. Consequently, appellant has rightly been denied the facility of payment of the deemed tax/duty to avail CENVAT credit. 10. Learned Counsel submits ....