TaxTMI 
TaxTMI 
2018 (3) TMI 398
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....the appellant had availed credit of the inputs i.e. M.S Coils used in manufacture of said pipes. Further in some cases they made clearances by reversing the credit. They were issued show cause notice alleging that M.S Coils/ HR sheets used for manufacture of such pipes were exclusively used for manufacture of exempted final products being of specific grade and were even separately stored hence could not be treated as common input used for manufacture of dutiable or exempted goods. They have availed credit of Rs. 68,23,448/- during the period January' 2004 to April' 2004 on the raw material exclusively used in exempted goods and also maintained separate records of the same. That also for the period May' 2004 to April' 2004 they have availed ....
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..... Advocate appearing for the Appellant submits that in respect of demand of Rs. 1,01,25,986/- the adjudicating authority has erred in passing the impugned order as the HR coils and MS Plates of different sizes or thickness are used in the manufacture of various excisable goods cleared both on payment of duty as well as under exemption and are thus common inputs. They have rightly took the credit and reversed an amount equal to 8% or 10% of the sale value of the final product cleared under exemption notification. The final products are cleared under exemption only where the buyers provide the exemption certificate and in absence of same the goods are cleared on payment of duty. The demand has been made on the ground that these inputs i.e HR ....
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....its that after objection of the revenue for the previous period they maintained separate account of HR coils and MS Plates used in manufacture of exempted and dutiable final products and did not avail credit of HR Coils and plates used in final products cleared under exemption. This constitute 98% of the value of the inputs used in the manufacture. For the balance 2% of the inputs which were mainly consumables they reversed the credit attributable on the common inputs used. The revenue has raised a demand of 8/10% of the sale price of the exempted goods on ground that there is no provision for proportionate reversal of credit on consumables. He submits that once the credit is reversed there cannot be any demand of 8/10% on the sale price of....
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....not to pay the amount in terms of Rule 6 (3) and instead reverse the credit. Further it is to be seen that apart from said input i.e HR Coils and MS Plates the Appellant has used common inputs i.e welding electrodes, welding wires, flux, oxygen gas, grinding wheels etc. in manufacture of exempted goods and thus reversed the amount in terms of Rule 6 (3) (b). In such circumstances it cannot be said that all the inputs are for exclusive use in exempted final products. The Rule 6 (1) and Rule 6 (3) (b) both cannot be applied in case of such clearances. Our views are based upon the tribunal judgment in case of Mahindra & Mahindra Ltd. - 2007 (211) ELT 481 (TRI). The relevant portion of the said order is as under : "32. The next issue now to be....
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.... Associated Cement Company and Kerala High Court decision in the case of CIT v. S.K. Srinivasan (cited supra). Accordingly it is held that the appellants are entitled to take credit on non-common inputs upto the date when explanation III came into force." The demand involved is for the period Jan' 2004 to April' 2005 and hence the above judgment is squarely applicable. In above circumstances the Board Circular dt. 09.10.2003 is not applicable to facts of the present case. We thus hold that the demand of Rs. 1,01,25,986/- is not sustainable. 7. Coming to the next demand of Rs. 64,40,555/- we find that the said demand has been made against the Appellant on the ground that they have used common inputs and hence liable to pay 8%/10% amount in....