2018 (1) TMI 43

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...., 1985. On the basis of Audit report conducted during March 2012, it was noticed that the Appellant had availed CENVAT credit on input services used in the manufacture and clearance of both dutiable and exempted final products namely, liquid Nitrogen and medicinal Oxygen without following the procedure laid down under Rule 6(3)(ii) & (iii) of CENVAT Credit Rules, 2004. Consequently, after correspondences with the Appellant, show cause cum- demand notice was issued to them on 9.6.2014 for recovery of the 5%/6% of the value of the exempted products i.e. an amount of Rs. 80,95,717/- for the period December 2009 to March 2013 with interest and proposal for penalty. On adjudication, the ld. Commissioner of Central Excise and Customs reduced the ....

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....uantum of proportionate CENVAT credit reversed by them during the period is incorrect, travels beyond the scope of show cause notice, hence, bad in law. In support, the ld. Advocate for the Appellant referred to the judgment of the Hon'ble Gujarat High Court in the case of C.C.E. Vs. Reliance Ports and Terminals Ltd. - 2016 (334) ELT 630 (Guj.), in the case of C.C.E., Ballapur Industries Ltd. - 2007 (215) ELT 489 (SC) and C.C.E. Vs. Gas Authority of India Ltd. - 2008 (232) ELT 7 (SC). 4. Further, the ld. Advocate has submitted that the Appellant had correctly applied the formula prescribed under Rule 6(3A) of the CENVAT Credit Rules, 2004 in arriving at the quantum of proportionate CENVAT credit attributable to exempted products. It is his....

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....oportionate credit reversed by them. In the letter dated 20.11.2013, it has been informed to the Department that total credit required to be reversed was Rs. 4,31,140/-, whereas they have already reversed the credit of Rs. 6,87,047/-. In the said statement, the Appellant had indicated inclusion of the clearance value to SEZ/100% EOU in arriving at the total turnover of the goods cleared. Even though the show cause notice was issued a year after i.e. 9.6.2014, no allegation on the correctness of proportionate credit reversed has been made out against the Appellant. Therefore, I find force in the contention of the ld. Advocate for the Appellant that in the adjudication order, the ld. Commissioner has travelled beyond the scope of the allegati....