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2014 (8) TMI 777 - AT - Central ExciseCENVAT Credit - maintenance of separate records - Exemption from tax since MRP of the product is below ₹ 100 per kg - Held that:- as soon as assesse stopped paying duty on the exempted biscuits, they also stopped taking CENVAT credit on the inputs. No doubt they did not maintain separate account of sugar solution which he also confirmed. Separate account is to be maintained for inputs and no doubt the inputs are sugar, glucose, citric etc. Therefore this does not need to an automatic conclusion that assessee did not maintain separate account at all. Nevertheless, when a statement like this is given and when the duty is being demanded on the ground that appellant was not eligible for the benefit of exemption Notification No. 67/1995-CE, it was the duty of the officer to question Shri Mohananand verify the records and ensure that records have been maintained or not maintained and facts are brought out correctly. Once the CENVAT Credit itself is not taken, in respect of inputs utilized for exempted goods totally, and if this fact is coming out from the records, naturally there would be no need to maintain separate records since the very fact that credit has not been availed would be sufficient instead of making further queries and confirming the facts. Straight away proceedings have been initiated against the appellants on the ground that they were liable to pay duty on sugar syrup and it has been held to be marketable because it has a shelf life without carrying out any market enquiry and without collecting any evidence about its marketability and the fact that it has not been sold, proceedings were initiated. It is strange that only selective portion of the statement convenient to the department has been extracted in the show-cause notice resulting in proceedings culminating in confirmation of demand. When a portion of the statement has been used for making out a case, another portion of the statement cannot be ignored or held to be false without any evidence. In view of the above, we come to the conclusion that appellants can be said to have maintained separate records in view of the categorical submission of Shri Mohanan that they stopped taking CENVAT credit in respect of inputs used for exempted goods from 2007 itself - most important part of any investigation i.e. to ascertain facts, apply law to the facts and propose action in accordance with law has not been followed in this case. - Decided in favour of assessee.
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