TaxTMI 
TaxTMI 
2024 (4) TMI 559
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.... that the appellant is engaged in manufacture of Concrete Pumps, Concrete Mixer and Concrete Mixing Plants falling under Chapter Heading Nos. 84134000 and 84743110 respectively of the Central Excise Tariff Act, 1985. The appellant was issued two show cause notices. The first show cause notice dated 16.03.2012 was issued seeking demand of Rs.40,84,669/- being an amount equal to 5% of the value of exempted service rendered as "trading activity" for the period 01.04.2011 to 24.05.2011 as per Rule 6(3)(i) of the CCR, 2004 under proviso to Section 73(1) of the Finance Act, 1994 along with interest and penalty under Rule 15(1) of the CCR, 2004 read with Section 76 of the Finance Act, 1994. The second show cause notice dated 31.10.2012 and corrigendum dated 29.11.2012 was issued seeking demand of Rs.35,50,651/- being an amount equal to 6% of the value of exempted service rendered as "trading activity" for the period 01.04.2012 to 02.05.2012 as per Rule 6(3)(i) of the CCR, 2004 under proviso to Section 73(1) of the Finance Act, 1994 along with interest and penalty under Rule 15(1) of the CCR, 2004 read with Section 76 of the Finance Act, 1994. 2.2 The appellant filed detailed reply to t....
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....bsp;year 2012-13, but the Revenue did not accept the option availed by the appellant. 4.4 He further submits that reading of sub-clause (b) of Rule 6(3A) which provides that the payments are provisional for each month and therefore, there is nothing wrong to exercise the option at any point of time during the financial year. 4.5 He further submits that confirmation of demand under Rule 6(3)(i) of the CCR, 2004 would tantamount to deny the option provided to the assessee under the said rule. 4.6 He also submits that this issue is no more res integra and has been considered by various benches of the Tribunal and it has been consistently held by the Tribunal that exercise of option is only a procedural in nature and cannot deny the substantive benefits as provided under the rule. In support of his submission, he relies on the following case-laws: a) Mercedes Benz India (P) Ltd vs. CCE, Pune-I - 2015 (40) STR 381 (Tri. Mumbai) b) Rocky Marketing (Chennai) Pvt Ltd vs. CST, Chennai - Final Order No. 40936/2020 dated 03.11.2020 in Appeal No. ST/40279/2017 c) Emami Limited vs. CCE & ST, Valsad - Final Order No. 11791/2023 dated 25.08.2023 in Appeal No. E....
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.... and paid by the manufacturer or the provider of output service, in terms of the provisions of sub-rule (2) or sub-rule (3), as the case may be : Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder. Explanation 3. - For the purposes of this rule, exempted services as defined in clause (e) of rule 2 shall include an activity, which is not a ‗service' as defined in section 65B(44) of the Finance Act, 1994 [provided tha....
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....ured by him or, as the case may be, all exempted services provided by him, and such option shall not be withdrawn during the remaining part of the financial year. Explanation 2. - No CENVAT credit shall be taken on the duty or tax paid on any goods and services that are not inputs or input services. Explanation 3. - For the purposes of this sub-rule and sub-rule (3A),- (a) ―non-exempted goods removed‖ means the final products excluding exempted goods manufactured and cleared upto the place of removal; (b) ―exempted goods removed‖ means the exempted goods manufactured and cleared upto the place of removal; (c) ―non-exempted services‖ means the output services excluding exempted services.] [(3A) For determination of amount required to be paid under clause (ii) of sub-rule (3), the manufacturer of goods or the provider of output service shall follow the following procedure and conditions, namely :- (a) the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely :- (i) name, address and registration number of ....
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....b) value of exempted goods removed, during the preceding financial year; where F is the sum total of - (a) value of non-exempted services provided, (b) value of exempted services provided, (c) value of non-exempted goods removed, and (d) value of exempted goods removed, during the preceding financial year : Provided that where no final products were manufactured or no output service was provided in the preceding financial year, the CENVAT credit attributable to ineligible common credit shall be deemed to be fifty per cent. of the common credit; (v) remainder of the common credit shall be called eligible common credit and denoted as G, where,- G = C - D; Explanation.- For the removal of doubts, it is hereby declared that out of the total credit T, which is sum total of A, B, D, and G, the manufacturer or the provider of the output service shall be able to attribute provisionally and retain credit of B and G, namely, eligible credit and eligible common credit and shall provisionally pay the amount of credit of A and D, namely, ineligible credit and ineligible common credit. (vi) where manufacturer or the provider of the output service fails to pay the amoun....
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....le year)}], where the former of the two amounts is greater than the later; (e) where the amount under clause (d) is not paid by the 30th June of the succeeding financial year, the manufacturer of goods or the provider of output service, shall, in addition to the amount of credit so paid under clause (d), be liable to pay on such amount an interest at the rate of fifteen per cent. per annum, from the 30th June of the succeeding financial year till the date of payment of such amount; (f) the manufacturer or the provider of output service, shall at the end of the financial year, take credit of amount equal to difference between the total of the amount of the aggregate of ineligible credit and ineligible common credit paid during the whole year and the total of the amount of annual ineligible credit and annual ineligible common credit, namely, [{(A+D) aggregated for the whole year)} - {A(Annual) + D(Annual)}], where the former of the two amounts is greater than the later; (g) the manufacturer of the goods or the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of pa....
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....f Rue 6(3A). In the present case, the appellant has availed Cenvat credit in respect of common input services, which has been used in relation to the manufacture of the final product as well as for trading of bought out cars. Therefore they are supposed to pay an amount equivalent to Cenvat credit which is attributed to the input service used for exempted service i.e. sale of car. In our view, three options have been provided under Rule 6(3) and it is up to the assessee that which option has to be availed. Revenue could not insist the appellant to avail a particular option. In the present case the appellant have admittedly availed option as provided under Rule 6(3)(ii) and paid an amount as required under sub-rule (3A) of Rule 6. As regard the compliance of the procedure and conditions as laid down for availing option as provided under sub-rule (3)(ii), we find that foremost condition is that the appellant is required to pay an amount as per the formula provided under sub-rule (3A) on monthly basis. However, we find that as per the provision, payment on monthly basis is provisional basis, therefore it is not mandatory that whole amount or part of the amount was required to be paid ....
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....ing the option, however the delay can be taken as a procedural lapse. We also note that trading of goods was considered as exempted service from 2011 only, thus it was initial period. We are also of the view that there is no condition provided in the rule that if a particular option, out of three options are not opted, then only option of payment of 5% provided under Rule 6(3)(i) shall be compulsorily made applicable, therefore we are of the view that Revenue could not insist the appellant to avail a particular option. In the present case admittedly it is appellant who have on their own opted for option provided under Rule 6(3)(ii). The meaning of the option as argued by the Ld. Sr. Counsel is that "option of right of choosing, something that may be or is chosen, choice, the act of choosing". From the said meaning of the term 'option', it is clear that it is the appellant who have liberty to decide which option to be exercised and not the Revenue to decide the same. 5.4 We find that the appellant admittedly paid an amount of Rs. 4,06,785/- plus interest, this is not under dispute. Therefore in our view, the appellant have complied with the condition prescribed under R....