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2019 (2) TMI 570 - AT - Central ExciseCENVAT credit - inputs used exclusively in the manufacture of exempted goods manufactured on job work basis - demand of 6% / 8% amount under Rule 6(3) of Cenvat Credit Rules, 2004 - Held that:- In the present case, the fact is also not under dispute that the appellant are using certain other inputs such as Zinc, Furnace Oils, Consumables, certain grades of angles/ channels etc. which are commonly used in the manufacture of exempted goods as well as on their own goods cleared on payment of duty, therefore, it cannot be said that the goods manufactured and cleared under exemption were manufactured from all the inputs which were used exclusively in such exempted goods. In the present case the appellant have opted for rule 6(3)(i) according to which they have paid 6%/ 8% of the value of the exempted goods, thereafter no further demand can be made as there is no provision that once a payment is made under Rule 6(3) (i) then further cenvat credit is required to be reversed - As regard the explanation (ii) given in sub Rule (3) of Rule 6, this explanation applies only in such cases where the exempted goods is manufactured wholly from the inputs which are exclusively used in the manufacture of such exempted goods. However, in the present case some of the inputs are common which were used in the manufacture of dutiable final product as well as exempted goods, therefore, the explanation II is not applicable in the present case. Moreover, the explanation II is applicable only with reference to Rule 6(2), however the appellant have not opted for said Rule and they have opted for sub Rule (3) of Rule 6 wherein unambiguous provision for payment of 6% / 8% of the value of exempted goods is provided. It is apparent that there is no exclusive input which were used in only exempted goods, for this reason also the demand applying Rule 6 (1) and (2) will not sustain - Since various consumables inputs were used in the manufacture of exempted goods well as dutiable goods, the option of payment of 8% / 10% was held correct. Time limitation - Held that:- The department was well aware about the entire working of the appellant as with reference to payment of 6% / 8% the appellants were issued SCN disputing the valuation, therefore, there is no suppression of fact on the part of the appellant - demand for the extended period beyond normal period is also not sustainable. Appeal allowed - decided in favor of appellant.
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