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2022 (1) TMI 505 - AT - Central ExciseCENVAT Credit - Exempt service or not - employee either provided accommodation in their residential colony and in some cases where the employees are residing outside the factory, house rent allowance given - deemed consideration under Rule 6 (3) of Cenvat Credit Rules, 2004 or not - HELD THAT:- As per Rule 6 for demanding 6%/7% it can be charged only on the value of exempted services. In the present case the appellant are not receiving any value by providing the rental house to their employee within the premises. Since no value is flowing from employee to the appellant there is no question of calculating 6%/7% on the value which does not exist - since the house was provided to the employee which are engaged in the manufacture of the final product hence ultimately all the activities get absorbed in the manufacture of the final product i.e Cement which is cleared of payment of duty. Shri. G Kirupanandan pointed out that the demand under Rule 6 is not only on the renting of the houses but also on the removable of waste and scrap. As of now it is a settled law that in respect of removable of waste and scrap, refuse or by-product Rule 6 is not applicable as held by the Hon’ble Bombay High Court in the case of HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 657 - BOMBAY HIGH COURT] and the said judgment has been upheld by the Hon’ble Supreme Court. In view of this settled position even on scrap the demand of 6% /7% in terms of Rule 6 (3) is not sustainable. The demand raised under Rule 6(3) is not sustainable - Appeal allowed - decided in favor of appellant.
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