2018 (7) TMI 764

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....phoric acid and caustic soda lye, as a result of which soap stocks/acid oil get separated. While vanaspati ghee and refined vegetable oil is fully exempted from duty, soap stock/acid oil is cleared on payment of duty. The department was of the view that since Cenvat credit had been availed in respect of phosphoric acid, caustic soda lye and sulphuric acid which were used in the manufacture of both dutiable and exempted final products and since no separate inventory and account of inputs used in the manufacture of dutiable and exempted final products had been maintained, the provisions of Rule 57CC of the Central Excise Rules, 1944 would apply and hence, the appellant in respect of clearances of exempted goods i.e. Vanaspati/Refined Vegetabl....

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....7 titled as Commissioner of Central Excise, Commissionerate, Delhi-IV v. M/s. Hammer Forge, Faridabad. In the present appeal, the following question of law arises for adjudication by this court : "Whether the Customs, Excise, Service Tax Appellate Tribunal, New Delhi was right in dismissing the appeal filed by the Department by holding that the assessee cannot be said to have taken credit in view of the reversal of the entire Modvat credit taken on inputs, when the Rule 6 clearly says that the assessee who has not maintained separate inventory and has taken credit on common inputs to manufacture dutiable and exempted products has no option other than the exceptions mentioned in sub-rule 3(a) but to reverse 8% of the price of the exemp....

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....ellant have filed this appeal. 2. Ld. Advocate for the appellant pleaded that the adjudicating authority has travelled beyond the scope of remand order of the Hon'ble High Court while examining and confirming the demand of amount of 8% in terms of the provisions of Rule 57CCC. He further submits that actual amount of Cenvat credit availed on common inputs attributable to exempted products has already been reversed and the appellant have also deposited differential interest @ 24% per annum. In this regard, he drew attention to challans at pages 352 to 353 of the paper book. He further contended that the issue was already settled by way of retrospective amendment in Finance Act, 2010. He argued that objection of the adjudicating authority ....

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....% per annum. At the relevant time, the entitlement of the appellants to reverse the credit to the extent of common inputs used in the manufacture of exempted final products was in doubt. However, subsequently Rule 57CCC was inserted in the Central Excise Rules, 1944 through Finance Act, 2010 for reversal of actual credit by the manufacturer availing the credit of specified duty in respect of inputs used for manufacture of final product, which are not chargeable to duty or chargeable to nil rate of duty by payment of amount equivalent to amount of credit attributable to inputs used in the manufacture of such final products. We find that the said amendment was retrospective in nature and covers the impugned period in this appeal. Sub-section ....