2019 (2) TMI 1174

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.... the CESTAT Procedure Rules, 1982. 2. During the course of arguments, the learned counsel for the Appellants submitted that the instant Application relates to the part of order under heading "Non Payment of an amount equivalent to 6% of the value of exempted goods cleared during July 2014 to March 2015". He submitted that the Appellants were maintaining separate records from 01.07.2014 and stopped availing credit on inputs/inputs services exclusively used for the manufacture of exempted goods. This change was duly intimated to the Department vide letter dated 29th August, 2014. The Department never took any objection for opting out of 6% payment scheme and, therefore, continued till 26.09.2015. He also submitted that the Appellants are m....

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.... no such restriction is contemplated under the said Rule 6(3) of the Cenvat Credit Rules, 2004 restricting the assessee from dropping such option and maintain records in terms of the Rules 6(1) or 6(2) of the Cenvat Credit Rules, 2004. He submitted that in view of the said Rule, demand upheld by the Tribunal as per Explanation I to Rule 6(3), is wrong and needs to be rectified and, it be held ,the Appellants are free to resort to Rule 6(2) and maintain the separate records. To strengthen his arguments, he relied upon the ratio of the judgment in the case of Mercedes Benz India(P) limited Vs CCE, Pune, 2015(40) S.T.R 381(Tri-Mumbai), wherein it was held that: "5.3 As regard the contention of the adjudicating authority that this opti....

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..... To support his argument, he placed reliance on the decision of the Hon'ble Supreme Court in the case of S. Sundaram Pillai Vs. Pattabiraman, (1985) 1 SCC 591, wherein while considering the object of an Explanation, it was observed that: "52. In Dattatraya Govind Mahajan v. State of Maharashtra, Bhagwati, J. Observed thus (SCC p.563, para 9) : It is true that the orthodox function of an Explanation is to explain the meaning and effect of the main provision to which it is an Explanation and to clear up any doubt or ambiguity in it..... Therefore, even though the provision in question has been called an Explanation, we must construe it according to its plain language and not on any priori considerations. 53. Thus f....

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....iew that the Appellants have only reverted or changed to compliance as per Rule 6(2) of Cenvat Credit Rules, 2004 by maintaining separate accounts. 8. We find the same is permissible, as the Explanation I under sub-Rule 3 restricts opting out of one of the options availed, out of the options, and availing the other option, within sub-Rule 3 of Rule 6. For more clarification, we reproduce the Explanation I which reads as under : "Explanation I - If the manufacturer of goods or the provider of output service, avails any of the option under the sub-rule, he shall exercise such option for all exempted goods manufactured by him or, as the case may be, all exempted services provided by him, and such option shall not be withdrawn durin....