TMI Blog2007 (7) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... sides with coal tar or cement or polyethylene or other plastic materials. In terms of contracts entered into between the appellants and contractors engaged by the Chennai Metropolitan Water Supply and Sewerage Board (Water Supply Board, for short), the appellants manufactured coated steel pipes out of m.s. sheets supplied by such contractors and cleared the pipes, without payment of duty, to them by availing exemption under Notification No. 6/2002-C.E. (Sl. No. 196A). Identical goods manufactured by the appellants out of raw material independently procured by them were supplied to other customers on payment of duty. Thus, during the tenure of the aforesaid contracts, the appellants had cleared a part of their pipe production without paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer shall pay an amount equal to 8% of the total price (excluding sales tax and other taxes, if any, paid on such goods) of the exempted final products charged by the manufacturer for the sale of such goods at the time of their clearance from factory. This provision, contained in Rule 6(3)(b), was followed by the appellants during the period of dispute (March 2003 to June 2004). They were not maintaining separate accounts as required under Rule 6(2). During the above period, they were clearing the exempted pipes to the Water Supply Board s contractors without payment of duty and similar pipes to independent buyers on payment of duty, after availing Cenvat credit on the entire quantity of inputs. In other words, they opted not to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in or in relation to the manufacture of dutiable final product and those intended for use in or in relation to the manufacture of exempted goods. It is submitted that it has not been claimed by the present appellants that they were incapable of maintaining separate accounts. Ld. DR has also referred to the nature of transaction between the appellants and the contractors of the Water Supply Board. According to him, no sale was involved in those transactions and therefore Rule 6(3)(b) cannot be brought into play. Ld. Counsel, in his rejoinder, has referred to the definition of sale given under Section 2 (h) of the Central Excise Act. He submits that all the elements of sale so defined are present in this case and therefore Rule 6(3)(b) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling Cenvat credit on the entire quantity of inputs without maintaining separate accounts. Ld. Commissioner seems to have thought that only those manufacturers of dutiable and exempted final products who are incapable of maintaining separate accounts are allowed under Rule 6(3) to pay 8% of the price of the exempted final products without maintaining separate accounts. But the provisions do not seem to mean so. In the result, the decision cited by ld. Counsel remains as authority on the issue. Para 6 of the Tribunal s order is reproduced below :- 6. 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 accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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