TaxTMI 
TaxTMI 
2017 (2) TMI 769
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.... as exempted goods. Though appellants maintained separate accounts in regard to common inputs used for manufacture of exempted and dutiable products, no such separate accounts was maintained in respect of input services. A show-cause notice was issued to the assessee as to why the amount of 10% of the price of the exempted goods to the tune of Rs. 4,58,500/- should not be paid by them under the provisions of Rule 6(3)(b) of the CENVAT Credit Rules, 2002 along with interest and penalties also should not be imposed. After due process of law, the original authority confirmed the demand along with the interest and imposed penalty of Rs. 2000/- under Rule 15(3) of CENVAT Credit Rules. Aggrieved by the said order, the appellants filed appeal befo....
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....as brought to the notice of the Commissioner(Appeals), the Commissioner(Appeals) declined to give the benefit of the amendment to the appellant stating that the said amendment has to be applied by the jurisdictional Commissioner and not by the Commissioner(Appeals). It was also noted in the order that the quantum of the credit that has to be reversed is not certain. The learned counsel relied upon the judgment laid in the case of IPCA Laboratories Ltd. vs. CCE, Indore [2015-VIL-270-CESTAT-DEL-CE]. He contended that the facts are identical to the present case and the Tribunal in the said case had observed that during the period of dispute i.e. prior to 01/04/2008, the option of paying an amount equal to the price of sale value of the exempte....
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..... In the present case, the appellant has not filed an application for opting to reverse the credit. However, even prior to this amendment, the appellant has reversed the credit applying the very same formula which was elucidated in the judgment in Philips India (supra). He also produced the Chartered Accountant certificate. These facts were available before the Commissioner(Appeals). Without considering these, the Commissioner (Appeals) has blindly denied to give benefit of the amendment and proceeded to uphold the demand of 10% of the value of the clearances. Thus the Department has force upon the assessee to pay 10% of the value of clearances even though the assessee has reversed the credit attributable to the input services used for manu....
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.... appellant would be entitled to reverse the Cenvat credit attributable to the inputs/input services used in or in relation to the manufacture of the exempted final product. According to the appellant, they have not taken and have foregone the Cenvat credit attributable to the quantum of input services, attributable the turnover of exempted final product and this fact is not disputed. The Commissioner does not even dispute the quantum of the credit foregone. Once, the appellant have foregone the proportionate Cenvat credit in respect of input services used in or in relation of the manufacture of exempted final product, they have to be treated as complied with the provisions of sub-rule (3) of Rule 6 and hence, there cannot be any demand of a....
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....on. The said rule does not say that on failure to intimate, the man his choice to avail credit. Rule 6(3A), as seen expressly stated is nothing but a procedure contemplated for application of Rule 6(3). Therefore, the argument of the Revenue that the requirement to intimate the department about the option exercised, is mandatory and that on failure, the appellant has no other option but to accept and comply Rule 6(3)(i) and make payment of 5 % /10% of sale price of exempted goods/value of exempted services is not acceptable or convincing. The Rule does not lay down any such restriction. The procedure and conditions laid in Rule 6(3A) is intended to make Rule 6(3) workable and not to take away the option available to the assessee. In any cas....