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2017 (12) TMI 314 - AT - Central ExciseCENVAT credit - manufacture of dutiable as well as exempt goods - Un-Denatured Ethyl Alcohol/ Rectified Spirit - Whether Un-Denatured Ethyl Alcohol/ Rectified Spirit manufactured by the assessee are "exempted goods" in terms of Rule 2(d) of the CCR, 2004 and consequently, whether the provisions of Rule 6(3) of the CCR, 2004, apply to the present case? - Whether the assessee is liable to pay 10% of the value of Un-Denatured Ethyl Alcohol/Rectified Spirit at all in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2004?? - Held that: - Under CCR, 2004, where an assessee manufacturer dutiable and non-dutiable product from the same input, Rule 6(2) provides that the manufacturer has to maintain separate accounts and inventory of the inputs used in dutiable and non-dutiable products. If it is not possible to maintain such separate accounts, Rule 6(3) demands payment of an amount as calculated under Rule 6 (3)(a) or 6(3) (b) - Admittedly, the appellants have not maintained separate accounts. However, after January, 2006, the appellants reversed 10% of the price of Un-Denatured Ethyl Alcohol in terms of Rule 6(3)(b). Whether with effect from 01.03.2005 Un-Denatures Ethyl Alcohol is an exempted product-as alleged by department or non-excisable product as contended by appellant? - Held that: - The erstwhile Tariff Heading 22.04 covered by both Denatured and Un-Denatured Ethyl Alcohol. The Denatured Ethyl Alcohol was subject to 16% duty. Alcohol other than Denatured Ethyl Alcohol (Un-Denatured Ethyl Alcohol) carried "NIL" rate of duty. In the revised Tariff Schedule (w.e.f. 01.03.2005), there is no corresponding Heading/sub-heading for Undenatured Ethyl Alcohol. The Central Excise as well as Customs Tariff was aligned and in the Customs Tariff Schedule 'Un-Denatured Ethyl Alcohol' falls under Tariff heading 22.08. is left blank without mentioning any goods. From the above, it can be seen that the arguments of the learned counsel for appellant that w.e.f. 01.03.2005, Un-Denatured Ethyl Alcohol is non- excisable is not without force. Un-Denatured Alcohol are not specified goods under Rule 6(3)(a) and the demand is unjustified - appellant is not liable to pay 10% of the price in terms of Rule 6(3)(b) of CCR, 2004. Appeal allowed - decided in favor of appellant.
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