TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 18
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....nitrate, nitric acid methanol and Iso-Propyl alcohol classifiable under Chapter 28, 29 of the First Schedule to the Central Excise Tariff Act, 1985, which are chargeable to Central Excise duty. The respondents are also engaged in the manufacture of fertilizers classified under Chapter 31 of the said First Schedule and these are exempted from payment of Central Excise duty. The respondents are registered taxpayers with jurisdictional Central excise authorities and are holding Central Excise Registration No.AAACD1388DXM001 for manufacture of aforesaid excisable goods on payment appropriate Central Excise duty and for compliance with Central Excise statue. 3.2 The Respondents uses two sources for generation of steam. One method is by generating steam from the boilers by using 'Naphtha' as a fuel; and the steam generated in this process is a high pressure steam and is not used in manufacture of fertilizers. The other method is where steam is generated in 'ammonia plant', where steam is generated due to the exothermic chemical reaction during the manufacture of ammonia. In the ammonia plant, mild pressure steam is generated by using waste heat through waste heat boilers. Mild pressur....
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....2008 to July, 2009. Feeling aggrieved by the said order, the respondents had again approached the Tribunal in Excise Appeal No. 85562 of 2014. In disposal of the above appeal, the Tribunal had passed Final Order No. dated 18.03.2014, wherein the adjudicating authority was directed to consider the matter of submission of C.A. certificate to be produced by the respondents to the department, and the adjudicating authority shall grant the benefit provided under the Finance Act, 2010 with respect to reversal of credit on inputs used in the manufacture of exempted product. 3.4 In compliance with the remand directions of the Tribunal, learned Principal Commissioner of Central Excise had adjudicated the case vide Order-in-Original dated 08.10.2015, wherein he had accepted the reversal of CENVAT credit of Rs.13,74,348/- for the period September, 2007 to July, 2009 under Rule 6 of the CENVAT Credit Rules, 2004; further he had also accepted the payment of interest of Rs.7,12,101/- in due discharge of the liabilities payable by the respondent. Further, he imposed a penalty of Rs.1,00,000/- under Rule 15(1) ibid. Accordingly, the proceedings initiated vide SCN dated 08.10.2008 for the period....
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....is with effect from 01.03.2008, and the government has provided retrospective amendment in allowing the proportionate reversal of CENVAT credit to the extent used for exempted goods. 5.2 He further stated that the respondent had filed the requisite declaration under Rule 6 ibid with the jurisdictional Central Excise authorities on 31.01.2009, and have exercised the option under Rule 6(3A) ibid for reversing the credit under Rule 6(3)(ii) ibid. Therefore, he stated that the respondent had duly fulfilled the requirement of Rule 6 of the CCR of 2004, and there is no time limit provided in that rule for filing such a declaration. Furthermore, he stated that the respondent had reversed the proportionate credit as per the formula prescribed under Rule 6(3)(ii) ibid. The conditions and procedures prescribed under Rule 6(3A) is procedural in nature and therefore non-filing of declaration is merely a procedural irregularity, which cannot take away substantive benefits under the CCR of 2004. 5.3 Learned Advocate also stated that it is settled law that were nonfiling or late filing of declaration cannot take away the substantial benefit of Rule 6 (3A) of CCR of 2004 from the assessee, w....
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....nput or input service used in the manufacture of exempted goods or for provision of exempted services, except in the circumstances mentioned in sub-rule (2). xxx xxx xxx xxx (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow any one of the following options, as applicable to him, namely:- (i) the manufacturer of goods shall pay an amount equal to ten per cent. of value of the exempted goods and the provider of output service shall pay an amount equal to eight per cent. of value of the exempted services; or (ii) the manufacturer of goods or the provider of output service shall pay an amount equal to CENVAT credit attribute to inputs and the input services used in, or in relation to, the manufacture of exempted goods or for provision of exempted services subject to the conditions and procedure specified in the sub-rule (3A). xxx xxx xxx xxx (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 ....
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.... the President. (3) The Commissioner of Central Excise shall, on receipt of an application under sub-section (2), verify the correctness of the amount paid within a period of two months from the date of receipt of the application and in case the amount so paid is found to be less than the amount payable, he shall call upon the applicant to pay the differential amount along with interest, which shall be paid within a period of ten days from the date of receipt of the communication from the Commissioner in this regard. (4) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done, at any time during the period commencing on and from the 10th day of September, 2004 and ending with the 31st day of March, 2008, relating to the provisions as amended by sub-section (1), shall be deemed to be and deemed always to have been, for all purposes, as validly and effectively taken or done as if the amendment made by sub-section (1) had been in force at all material times. (5) For the purposes of sub-section (1), the Central Government shall have....
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....8, w.e.f. 01.04.2008, had prescribed certain obligations on the part of the manufacturer of dutiable and exempted goods as well as for the provider of taxable and exempted services. In sub-rule (3) to Rule 6 of CCR of 2004, the assessee manufacturing goods was given options, either to maintain separate accounts for receipt, consumption and the inventory of input and input services meant for manufacturing dutiable final products and exempted goods, in order to ensure that such quantity of input or input services used in the manufacture of exempted goods are not taken with CENVAT credit; or, where the assessee is not maintaining separate accounts, then, as prescribed therein, the manufacturer of goods shall pay an amount equal to 10% of the value of exempted goods, or, pay an amount equivalent to CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of exempted goods subject to certain conditions and procedure to be followed. 8.3 For the period prior to the above change brought in reversal of CENVAT credit as above, retrospective amendment was made in the Finance Act, 2010. Since, such retrospective provision was required for a specifi....
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.... what is required to be examined is whether the required amount of CENVAT credit as required under the CENVAT statute has been duly discharged or not by the respondents. 8.6 The various issues of dispute in the above case, had been examined by the Tribunal at two stages, one at the time of hearing in Excise Appeal No. E/469/2012, where after considering the fact that the declarations made by the respondents and actual payments of proportionate amount of CENVAT credit having not been taken by the adjudicating authority, the Tribunal had remanded the case for de novo adjudicating by the original authority vide Order dated 14.05.2013. The relevant paragraph in the said order is extracted and given below: "4. We find that total five show cause notices which are the subject matter of the adjudication orders under appeal were issued on the ground that the appellants are availing credit in respect of the common inputs/input services used in or in relation to the manufacture of the goods cleared on payment of duty as well as exempted goods. We find that the Appellants filed declarations under Rules 6(3) and 6(3A) of the Cenvat credit Rules opting proportionate reversal of credi....
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....er annum from the due date of reversal to the actual date of reversal of credit. To that extent, the contention of the Revenue that interest liability should be discharged @24% per annum is sustainable. 5.2 The second issue for consideration is verification of the quantum of credit reversed by the appellant. In this particular case though the appellant has claimed that they have reversal credit correctly, the Revenue has not bothered to verify this reversal. It has also been contended that the appellant did not produce C.A. certificate showing the actual amount of reversal required to be done and the credit reversed within the time limit stipulated in the Finance Act, 2010. The Hon'ble High Court of Gujarat in the case of Shree Rama Multi Tech Ltd. Vs. Union of India - 2011 (267) E.L.T. 153 (Guj.) dealt with a similar situation and directed the appellant therein to produce the necessary evidence in the form of certificate from the Chartered Accountant or Cost Accountant for the relevant period certifying the amount of input credit attributable to the inputs used in our relation to the manufacture of final product which are exempt from the whole duty or chargeable to Nil ra....
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....(supra), have been examined by the learned Commissioner of Central Excise, Raigad Commissionerate in the impugned order. On detailed examination of such issues, he had accepted the reversal of CENVAT credit of Rs.13,74,348/- made by the respondents for the period September, 2007 to July, 2009 under Rule 6 of the CENVAT Credit Rules, 2004; further he had also accepted the payment of interest of Rs.7,12,101/- in due discharge of the liabilities payable by the respondent, besides imposition of a penalty of Rs.1,00,000/- on the respondents under Rule 15(1) ibid. 8.9 In arriving at the above decision, the adjudicating authority had recorded his findings as follows: "28. I find that the assessee vide their letter bearing Ref. No. 150/CE/01/2014-15/24 dated 6th June 2014 filed in tis office on 12.06.2014, submitted a Certificate issued by Mr. Y.R. Doshi & Co. - Cost Accountant, Mumbai. I have perused the Certificate dated 28th May 2014 along with one annexure, issued and signed by Shri Y.R. Doshi, Cost Accountant (M. No.3286) of M/s Y.R. Doshi & Co., Cost Accountant, C-7/14, Jeevan Bima Nagar, Borivilli (West), Mumbai - 400 103. I find that they have certified that the CENVAT ....
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.... Rs.7,12,101/- paid @24% on the amount of Rs.13,74,348/- for the relevant period. I am, therefore, inclined to accept the reversal of Rs.13,74,348/- and also payment of interest of Rs.7,12,101/- for the period from September 2007 to July 2009. I also order appropriation of the interest amount of Rs. 7,12,101/- as the interest paid by the assessee @24% ibid. In view of the said certification of the Cost Accountants M/s Y.R. Doshi & Co., on due reconsideration of the matter, I hold that the benefit provided in Finance Act, 2010 with respect to reversal of credit on inputs used in the manufacture of exempted goods is legally available to the assessee, 31. I find that the assessee had availed CENVAT Credit on common inputs Naphtha and Furnace Oil, which were admittedly in the manufacture of both dutiable and exempted goods. I find that the assessee failed to maintain separate accounts for the usage of said Naphtha and Furnace Oil for the period from September 2007 to July 2009 covered in the two show cause notices, they have violated the provisions of Rule 6(1) of the CENVAT Credit Rules, 2004. The voluntary reversal of amount of Rs. 13,74,348/- and payment of interest of Rs.7....