TMI Blog2018 (12) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-rule 3A (b) (iii). CENVAT Credit - sale of electricity generated by the appellant to the other customers against monetary consideration - demand of reversal of credit on the ground that electricity is an exempted commodity - Held that:- That is the electricity is held to be an excisable goods. Once it is held as excisable, denial of cenvat credit there upon is contradictory to the legislative intent. The findings are therefore, liable to be set aside - credit allowed. CENVAT Credit - quantity of input as is used in or in relation to the manufacture of exempted goods - waste/by-product - Held that:- Iron fills as are emerging as a by-product but an inevitable waste due to being segregated during the manufacture of the final pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely in the manufacture of excisable goods. It was alleged that the appellant have availed cenvat credit on inputs/input service relevant to both in dutiable and exempted excisable goods, which have been sold to outside parties for monetary consideration without maintaining separate accounts of the cenvat credit/service tax credit taken for the manufacture of dutiable, as well as, exempted goods as prescribed under Rule 6 (2) of the Cenvat Credit Rules, 2004 (CCR, 2004). Nor they had paid an amount equal to 6% of value of the exempted goods cleared/ sold during the period from April 2014 to March, 2015 as prescribed under Rule 6(3) (i) of CCR, 2004. Resultantly, a show cause notice No.6517 dated 24.06.2016 was served upon the appellants prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of dutiable as well as exempted products, any by-product/ waste arising during such manufacture, the same cannot be subjected to levy or cannot required to be accounted in terms of Rule 6 (2) or 6 (3) (b) of CCR, 2004. Above all, the show cause notice is alleged to be barred by period of limitation. Appeal is accordingly, prayed to be allowed. 4. Ld. DR per-contra has impressed upon that appellant did not maintain the separate accounts for the cenvat credit taken for the manufacture of dutiable as well as exempted goods. Though the appellant had submitted about the option vide letter dated 01.04.2014 in the requisite format in terms of Rule 6 (3A) of CCR but still appellant was required to make monthly provisional payment of the amount e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer 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 No. of the manufacturer of goods or provider of output service; (ii) date from which the option under this clause is exercised or proposed to be exercised; (iii) description of dutiable goods or taxable services; (iv) description of exempted goods or exempted services; (v) CENVAT credit of inputs and input services lying in balance as on the date of exercising the option under this condition; (b) the manufacturer of goods or the provider of output service shall, determine and pay, provisionally, for every month, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has alleged the credit qua the sale of electricity generated by the appellant to the other customers against monetary consideration on the ground that electricity is an exempted commodity. But perusal of order under challenge in para 6.3 thereof, the Commissioner (Appeals) has recorded as follows:- 6.3 Electricity is specified under the chapter heading 27160000 of the first schedule to the Central Excise Tariff Act, 1985 (5 of 1986). Hence Electricity which is generated by the Appellant within the same premises and under the same title in which Sponge Iron, Billets/M.S. Ingots, are generated, are excisable goods. That is the electricity is held to be an excisable goods. Once it is held as excisable, denial of cenvat cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either to maintain separate account and inventory for the input and input services which are used in the manufacture of dutiable and exempted final product and avail Cenvat credit only in respect of inputs/input services used in the manufacture of dutiable final product and if he does not maintain such separate account and inventory, he would be required to pay an amount equal to 10% of the value of the exempted final product at the time of clearance. In this case, I find that iron ore fine has emerged as an unavoidable and inevitable waste and compliance with the provisions of Rule 6(2) is impossible. The provisions of Rule 6(3)(b) of Cenvat Credit Rules, 2004 become applicable only if the manufacturer consciously manufactures dutiable an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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