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2005 (9) TMI 174 - AT - Central ExciseCenvat/Modvat - Manufacturers of MS Pipes (Steel Pipes) - whether Rule 6(3) provide option to manufacturer whether or not maintain separate accounts? - Excisable commodity - HELD THAT:- We have gone through the records of the case carefully. When a manufacturer uses common inputs in respect of dutiable and exempted products, normally he is expected to maintain separate accounts for receipt, consumption and inventory of the inputs. This is so because he could take credit only on the inputs intended for use in the manufacture of dutiable goods. This is as per Rule 6(2) of Cenvat Credit Rules, 2002. However, it is not always possible for a manufacturer to maintain separate accounts. Thus, the manufacturer need not maintain separate accounts, but he should pay 8% of the price of the exempted final products. This is as per Rule 6(3) of the Cenvat Credit Rules, 2002. A careful reading of Rule 6(3) shows that the manufacturer has the option not to maintain separate accounts. In other words, the manufacturer can choose not to maintain separate accounts and pay 8% of the price of exempted final products. When the manufacturer does that, he is perfectly complying with the Cenvat Credit Rules. In the present case, Revenue has seized certain private documents from the appellants and holds that they would be governed by Cenvat Credit Rules 6(2). In our view, this is not correct. When an option is given to the manufacturer, Revenue cannot force him to adopt a particular course. This will be against the Cenvat Credit Rules. Hence, we do not find much merit in the OIO. The same is set aside by allowing the appeal.
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