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2011 (5) TMI 533 - CESTAT, AHEMDABADUtilization of cenvat credit for payment of amount of 10% of the value of the exempted final products in terms of provisions of Rule 6(3)(b) and for clearance of the inputs - Held that:- As inputs utilized in the manufacture of dutiable as also exempted final products, the appellants have followed the provisions of Rule 8 for discharging their duty liability on consignment basis and out of PLA, during the period of dispute on account of default for payment of duty in the month of March 2007 - The appellants were required to pay 10% of value of the final exempted goods in terms of the provisions of Rule 6(3)(b) of Cenvat Credit Rules - As this amount payable at the time of clearances of the exempted final products is primarily intended to counter-effect the credit availed on the inputs used in the manufacture of such final exempted products. As such, the intent being to neutralize the credit so availed, the explanation provides for payment from the cenvat credit account itself. As such, in views to apply the provisions of Rule 8 (3A), requiring the assessee to pay duty out of PLA during the period of default would not apply to the provisions of Rule 6 (3)(b) payments - as appellants are regularly making payments from PLA, if the demand in question is held to be payable from PLA, they are admittedly entitled to make a re-credit entry in their cenvat credit account as they have already debited the said amount from their cenvat credit account - The said credit would again be available to the appellants to discharge duty on the final products cleared from their factory - As such,find that the entire exercise is the revenue neutral, thus making the demand against the appellant as un-sustainable - Decided in favour of assessee.
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