TaxTMI 
TaxTMI 
2017 (6) TMI 422
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....owners of chassis who have purchased these from the manufacturer after payment of duty and are availing exemption on such motor vehicle bodies. The respondent manufactured motor vehicle bodies for chassis who cleared the same on payment of duty for getting the body fabricated from outside and cleared those motor vehicle bodies on payment of duty. The respondent availed exemption on motor vehicles fabricated for independent owners of chassis. In terms of S.No.229 of Notification No.3/2001-CE dated 1.3.2001 and S.No.212 of Notification No.6/2002-CE dated 1.3.2002, the exemption under the said notifications is available subject to the conditions that the vehicles should be manufactured out of the chassis under heading 87.06 on which duty of ex....
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.... credit on other inputs. It is his submission that if the respondent is claimed the exemption then the respondent is liable to pay 8% of the value of chassis plus bodies of the vehicles, therefore, the impugned order is to be set aside. 4. On the other hand, learned Counsel for the respondent submits that the respondent has not taken the credit on duty paid chassis. The respondent has availed credit of the duty on other inputs for fabrication of bodies of that chassis. Therefore, the respondent is required reversed 8% of the value of motor vehicle bodies. The respondent has complied with the condition of Rule 6 (3) (b) of the Cenvat Credit Rules,2001 the impugned order is to be upheld. 5. Heard both sides and considered the submission....
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....l, the following order is passed: (a) The demand of Rs. 57,16,828/- is confirmed (b) The penalty imposed on the respondent is set aside. 9. With these terms, the appeal is disposed of. ( Pronounced in the open court on ) Per : Devender Singh, Member (T) 10.1 I had the benefit of going through the order recorded by learned brother Shri Ashok Jindal, Member (Judicial). While I agree with the confirmation of demand of Rs. 57,16,828/- as concluded by learned Member (Judicial), I am unable to agree on the issue of non-imposition of penalty. Hence, I record a separate order in respect of penalty. 10.2 It is undisputed that the assessee has manufactured 142 motor vehicles out of the duty paid chassis received from different pa....
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....htly pointed out by the adjudicating authority in the extract of O-I-O below, the respondents also deliberately violated the Rule 6(3)(b) of Cenvat Credit Rules, 2002: I find that Rule 6(3)(b) of Cenvat Credit Rules prescribes that in case a manufacturer uses common inputs for the manufacture of both dutiable and exempted goods and takes credit of duty paid on such common inputs, he will pay an amount equal to 8% of the total value of exempted goods before their clearance from the factory. This has been prescribed to nullify the effect of credit taken on inputs. Therefore, after reversal of 8% amount, these inputs do not remain cenvated ones and are at par with inputs on which no credit has been taken. Accor....
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....otifications and made themselves liable for penalty under Rule 25 of C.E. Rules, 2002. 10.5 Since the benefit of exemption is an exception for which the respondents have to actively bring themselves into the purview of that exemption to get benefit by complying with condition(s) therein, availing the benefit of notification despite non-fulfillment of the condition in the face of unambiguous law and by way of willful misstatement shows a clear intent to evade the duty. In the case of reversal of Cenvat Credit, there is no ambiguity that 8% of the total value of exemption goods was to be reversed. Still, they reversed / paid an amount to 8% of the value of bodies of the motor vehicles instead of complete motor vehicle. There is no question....
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....ial period of show cause notice, provided that the manufacturer shall pay an amount equal to 8% of the total price excluding sales tax and other taxes, if any, paid on such goods of the exempted final products charged by the manufacturer. I sought to know from the ld. DR whether the respondent has paid 8% on the value less than the value charged by the manufacturer to which he has informed that the said show cause notice is silent on the same. It is undisputed that the respondent have paid 8% on the price they have charged from their customers. Therefore, I am of the opinion that the finding of Ld. Brother Shri Devender Singh, Member (Technical) that in these circumstances, the penalty under Rule 25 is completely justifiedcannot be agreed t....