2016 (4) TMI 1224

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....is also engaged in trading, as it  has removed substantial quantum of inputs, as such, during the period 01/04/11 to 30/09/11, the purchase value of which was Rs. 15,80,36,593/-and sale value was Rs. 16,33,52,098. It appeared to revenue that in view of the amendment with effect from 01/04/11, the appellant was required to reverse/pay an amount of Rs. 7,90,183/-  calculated at the rate of 5% on value Rs. 15,80,36,593/for reversing credit on goods under Rule 6(3)(i) of CCR, 2004. In response to clarification sought by the audit vide letter dated 19/03/12 the appellant submitted their reply dated 26/03/12 stating that they are exercising option under clause (ii) of sub Rule 3 to pay an amount as determined under sub rule (3A) of rule 6 of CCR, for the financial year 2011 - 12 with effect from 01/04/11. According to the option exercised, the appellant debited/reversed Rs. 3,98,945/- vide debit entry dated 29/3/12, calculated for the period from 01/04/11 to 29/2/12, in accordance with the provisions of sub rule (3A) of rule 6 of CCR. It also intimated that they have reversed Rs. 1,66,001/- being entire Cenvat credit taken of service tax paid by them on the freight involved on ....

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....were imposed. 4.   Being aggrieved the appellant is before this Tribunal. The Counsel for the appellant urges that so far the issue of exercising option under rule 6(3A) (ii) of CCR is concerned, a Division Bench of this Tribunal in the case of Mercedes Benz India private Ltd. versus CCE Pune-I 2015 (40) S.T.R. 381 have observed and held as follows - "5.1 We have observed that in Rule 6(3) prevalent at the relevant time, two options have been provided :- (i)      Payment of 5% on value of exempted services. (ii)    Payment of an amount equal to the Cenvat Credit amount attributed to input services used in or in relation to manufacture of exempted goods or provision of exempted services as provided under sub rule (3A)(b). It is observed that the appellant has availed the option provided under sub-rule (3)(ii) of Rule 6 and paid an amount as per sub-rule (3A) along with interest and intimated the same to the jurisdictional superintendent in writing vide letter dated 14-3-2012. From the perusal of the said letter, we observed that the appellant categorically stated in the said letter that payment of Cenvat Credit, w....

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....option under this clause is exercised or proposed to be exercised; (iii)   Description of dutiable goods or taxable services; (iv)   Description of exempted goods or exempted services; (v)     Cenvat credit of inputs and input services lying in balance as on the date of exercising the option under this condition. As per the submission of the appellant and perusal of their letter along with enclosed details, it is found that more or less all these particulars were intimated to the Jurisdictional Superintendent. The appellant has been filing their returns regularly on monthly basis to the department. On perusal of the copies of the such return submitted along with appeal papers, it is observed that the particulars, as required under clause (a) of sub-rule (3A) of Rule 6 has been produced to the range superintendent. Therefore all the particulars which are required to be intimated to the Jurisdictional superintendent while exercising option stand produced. Though these particulars have not been submitted specifically under a particular letter, but since these particulars otherwise by way of return and some of the information under th....

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....ut services used in the exempted goods. It is also observed that in either of the three options given in sub-rule (3) of Rule 6, there is no provisions that if the assessee does not opt any of the option at a particular time, then option of payment of 5% will automatically be applied. Therefore we do not understand that when the appellant have categorically by way of their intimation opted for option provided under sub-rule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. 5.5 As discussed above and in the facts of the case that actual Cenvat credit attributed to the exempted services used towards sale of the bought out cars in terms of Rule 6(3A) comes to Rs. 4,06,785/- where as adjudicating authority demanded an amount of Rs. 24,71,93,529/-. In our view, any amount, over and above Rs. 4,06,785/- is not the part of the Cenvat Credit, which required to be reversed. The legislator has not enacted any provision by which Cenvat credit, which is other than the credit attributed to input services used in exempted goods or services; can be recovered from the assessee. 5. The Id. Counsel also relies on SMB ruling of this Tribuna....

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....ent of Cenvat credit and that the interest would be payable from the date Cenvat credit is taken or utilized wrongly. 6.   The Id. A.R. for revenue relies on the impugned order. 7.   Having considered the rival contentions, following the ruling of Division Bench of this Tribunal in the case of Mercedes Benz India Private Ltd (supra) I hold that the appellant have rightly exercised option before the close of the financial year on 26/3/12 and paid the appropriate duty by way of debit in the Cenvat credit in terms of rule 6(3A) read with Rule 6(1)(ii). So far the question of interest is concerned, I find in clause (C) of sub Rule (3A) of Rule 6, it is provided that the manufacturer of goods shall determine finally the amount of Cenvat credit attributable to the exempt goods and exempt services for the whole financial year in the following manner: - "(i) the amount of CENVAT credit attributable to inputs used in or in relation to manufacture of exempted goods, on the basis of total quantity of inputs used in or in relation to manufacture of said exempted goods ; " Further clause E of Sub-rule (3) provides the manufacturer of goods shall pay an amount equ....