TaxTMI 
TaxTMI 
2020 (4) TMI 196
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....of bulk drugs and drug intermediaries and manufactures both dutiable and exempted products. Up to March 2009 they had not availed any CENVAT credit on inputs used in the manufacture of goods cleared domestically but took credit only on the goods exported. From April 2009, they started availing credit on inputs used for dutiable goods cleared to DTA and on exempted goods which were exported. Learned counsel for the appellant submits that they have no common inputs and they did not avail any CENVAT credit at the time of receipt of the inputs. They availed CENVAT credit only based on the actual consumption of inputs used for manufacture of dutiable goods or used for manufacture of exempted goods which are exported. He explains their mod....
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....or manufacture of unit amount of output is fixed as the consumption coefficient. After the drugs are manufactured for either clearance to DTA on payment of duty or exempted goods for export, they take credit on the quantity of inputs used, calculated as per the consumption coefficient. 3. The show-cause notice alleges that the appellants have not maintained separate sets of accounts for dutiable and exempted products and therefore are required to reverse 6% of the value of exempted goods. Hence, show-cause notice raised the demand for reversal of CENVAT credit along with interest and the same has been confirmed by the impugned order and penalty has been imposed. 4. Learned counsel would submit that they have availed CENVAT credit only on ....
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....of any pharmaceutical drugs, duty paid or exempted. In this present case, the appellant is not taking any CENVAT credit at all on the invoices at the time of receipt of inputs. There is a specific input output co-relation for every batch of every drug known as consumption coefficient according to which the quantity of inputs which have gone into the manufacture of that particular batch of the particular drug can be ascertained. The appellant has been availing CENVAT credit only on the proportionate amount of inputs which are gone into manufacture of either dutiable goods or in the manufacture of exempted goods which are exported. Therefore in our considered view there is no availment of common input credit. The credit is availed only on suc....
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....ing in the course of manufacture of copper or zinc by smelting." A perusal of the aforesaid Rules would clearly show that sub-rule (i) to (vi) are identical and the difference in Rule 6(6) of the Cenvat Credit Rules, 2004 and Rule 6(5) of the Cenvat Credit Rules, 2002 is not relevant for the purpose of the present case. Rule 6(1), 6(2), 6(3) and 6(4) of the Cenvat Credit Rules under Cenvat Credit Rules, 2002 as well as under the Cenvat Credit Rules, 2004 remains the same. As noted earlier the object and purpose of Rule 6(6) of Cenvat Credit Rules, 2004 is to promote the policy of the Government that the benefit of duty paid on input is available as credit in respect of certain exempted goods as well as the exempted goods exported under bo....