2017 (11) TMI 255

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....t on input and cleared on payment of appropriate rate of Central Excise duty. During the course of manufacture of blood bags, waste is also generated and the appellants cleared it as PVC scrap under CETH 3915 3090 without payment of duty availing the exemption under Notification No.10/2003-CE dated 1.3.2003 as amended. On verification of the records of the appellant, it was noticed that the appellant had cleared PVC scrap amounting to Rs. 2,54,36,596/- during the period 1.4.2003 to 31.12.2005 by availing exemption under Notification No.10/2003 but no separate account has been maintained for receipt, consumption and inventory of CENVAT credit used for the manufacture of dutiable final products and exempted final products as provided in Rule ....

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....y were not aware about the provisions regarding availment of CENVAT credit of duty paid on inputs in such situation. He further submitted that appellant have been regularly filing ER-1 returns to the Central Excise Department wherein the details of clearance of PVC pipes (on payment of duty) and PVC scrap (under nil rate of duty) and availment of CENVAT credit were clearly shown and the Central Excise officers at no point of time issued any instructions/directions to the appellant regarding alleged incorrect practice followed by the appellants. He further submitted that there is no suppression of fact with intent to evade payment of duty and therefore, the invocation of extended period of limitation is wrong and illegal. 4.1 In support o....

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....t lucidly and clearly . 5. On the other hand, the learned AR reiterated the findings of the impugned order and submitted that it is only on account of audit that lapse on the part of the appellant was detected and the appellant has not informed the department regarding the availment of exemption under Notification. 6. After considering the submissions of both sides and perusal of the material on record, I find that though the appellant is not maintaining the separate records with regard to clearance of PVC pipes on payment of duty and PVC scrap cleared at nil rate of duty but they have been clearly showing both type of clearances in their ER-1 returns which has been regularly filed with the Department. Further, I find that this fact h....