9911796707
Case Laws
Acts
Notifications
Circulars
Classification
Forms
Manuals
Articles
News
D. Forum
Highlights
Notes
🚨 Important Update for Our Users
We are transitioning to our new and improved portal - www.taxtmi.com - for a better experience.
⚠️ This portal will be fully migrated on 31-July-2025 at 23:59:59
After this date, all services will be available exclusively on our new platform.
If you encounter any issues or problems while using the new portal,
please let us know
via our feedback form
, with specific details, so we can address them promptly.
Follow us:
|
Home
2004 (11) TMI 443 - AT - Central Excise
Issues:
Common issue involving Cenvat credit disallowance for inputs used in the manufacture of exempted goods. Analysis: The case involved a situation where the respondents were manufacturing both excisable and exempted goods, availing Modvat credit for duty paid on Residual Furnace Oil (RFO) used to generate steam for manufacturing processes. The respondents reversed the credit for RFO used in the manufacture of exempted goods, leading to a demand for duty payment equal to 8% of the value of exempted goods. The Commissioner disallowed the Cenvat credit on inputs used in the manufacture of exempted goods based on Rule 6 of Cenvat Credit Rules, 2001. The Revenue argued that since the respondents did not maintain separate records for inputs used in dutiable and exempted goods, they must pay 8% of the value of exempted goods, citing a circular issued by the Board. Rule 6 of Cenvat Credit Rules, 2001 explicitly states that credit shall not be allowed for inputs used in the manufacture of exempted goods. The Board's circulars clarified the payment requirements when separate records were not maintained, with the later circular applying only to a specific period. Further examination revealed Rule 57AD(2)(b) which mandates payment of 8% of the price of exempted products when modvatable inputs are used for both exempted and dutiable products without separate storage and accountal. Notably, inputs used as fuel are excluded from this rule, and the rule applies to items "other than fuel." In this case, RFO was used as fuel for steam generation, exempting it from the rule's application. Consequently, the Tribunal found no fault in the Commissioner's decision and rejected the appeals. This detailed analysis of the judgment highlights the application of Cenvat credit rules, the significance of maintaining separate records for inputs, and the specific provisions governing the treatment of inputs used for different types of products, ultimately leading to the dismissal of the appeals.
|
