2008 (6) TMI 428

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..... are using duty paid Naptha as one of their inputs for generation of steam which is further used in the manufacture of excisable goods i.e. fertilizer falling under Chapter 31 of the Central Excise Tariff Act, 1985 and are wholly exempt from payment of Central Excise duty. The applicants have not maintained separate sets of records as per the provisions of Rule 6(3) and this action of the applicant was found to in violation of the provisions of Rule 6(1) of the Cenvat Credit Rules, 2004. The authorities issued a show cause notice for demanding the duty on the Naptha used for generation of steam which was further used in the manufacture of exempt fertilizers for the period November 2005 to September 2006. The applicants contested show cause .....

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..... for manufacture of exempted fertilizers. It is his submission that this is a question of interpretation and the interpretation in this case should be held in the favour of the assessee. He submits that it is clearly established that the steam generated is used for the manufacture of both dutiable and exempted product. He would place reliance on the decision of the Tribunal's following case laws :- (1)     Raymond Ltd. v. Commissioner of Central Excise, Mumbai-III [2000 (117) E.L.T. 104 (Tribunal)] (2)     Ugar Sugar Works Ltd. v. Commissioner of Central Excise, Belgaum [2007 (214) E.L.T.337 (Tri.-Bang.)] (3)     Grasim Industries Ltd. v. Commissioner of Central Excise, Indore [2 .....

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..... well exempted products. We find from the records that the Provisions of Rule 6(1) has been amended w.e.f. 16-5-2005, which mandates an assessee to maintain separate set of records for the inputs which are used for exempted products and dutiable products. The submission of the ld. Counsel that the provisions of Rule 2(k) of the Cenvat Credit Rules, 2004, would be applicable in this case needs to be considered, the provisions of Rule 2(k) of the Cenvat Credit Rules, 2004 read as under :- (i)      all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the f .....

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