TMI Blog2014 (12) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the Tribunal, which is not disputed by the department, is that the inputs have been used in the manufacture both in respect of exempted goods as well as goods cleared on payment of duty without maintaining separate accounts. Since we have held that it is a case falling under Rule 6(3)(b), Rule 6(1) does not get attracted to the facts of the present case. - Following decision of Life Long Appliances Ltd., v. Commissioner of Central Excise, Delhi-III [2000 (4) TMI 90 - CEGAT, COURT NO. II, NEW DELHI] - Decided against Revenue. - C.M.A.No. 1945 of 2008 - - - Dated:- 27-11-2014 - R. Sudhakar And Pushpa Sathyanarayana,JJ. For the Appellants : Mr. P. Mahaadevan, Senior Counsel for Central Excise For the Respondent : Mr. Joseph Prabhakar for R1 R2-Tribunal JUDGMENT (Judgment of the Court was delivered by R. Sudhakar, J.) This civil miscellaneous appeal, at the instance of the Revenue, raises the following substantial questions of law:- ''(1) Whether on facts and in the circumstances of the case, the Tribunal is right in holding that the respondent is entitled to CENVAT Credit on the inputs used exclusively in the manufacture of goods, which are e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch we are not concerned for the present. 3. The basic premise on which the notices were issued is that the assessee had contravened Rule 6(1) of the CENVAT Credit Rules, 2001/2002/2004. But the assessee claimed that they are eligible for availing the CENVAT credit in view of Rule 6(3)(b) of the CENVAT Credit Rules, 2004, as they had paid the amounts specified under the said rule at the time of clearance of the final product. However, the Commissioner of Central Excise upheld the department's plea with regard to wrongful availment of CENVAT credit, except for a sum of ₹ 37,725/- for the month of June, 2001 for which demand was dropped. The Commissioner of Central Excise was of the view that out of 19 inputs, 16 inputs were exclusively used in the manufacture of exempted goods and therefore in respect of 16 exclusive inputs, the assessee is not entitled to avail the CENVAT credit, as it is relatable to usage in the manufacture of exempted goods, and therefore Rule 6(1) should come into play and the CENVAT credit availed thereon should be reversed. The assessee's plea that they did not maintain separate accounts of inputs used in the manufacture of exempted goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of exempted gear motor assembly for supply to M/s NEPC India Limited, was found to be erroneous as, on the contrary, a specific finding has been given by the Tribunal that for the period between 16.5.2005 and 31.10.2006, as there were invoices indicating the clearance of final product without payment of duty and the invoices issued to other customers for identical product indicated the clearance on payment of duty, it held that both the categories of invoices covered the clearance of identical goods in which the inputs mentioned in Serial Nos.1 to 16 had been consumed and thereby a finding has been rendered on fact that the identity of inputs in Serial Nos.1 to 16 could not be exclusively established in respect of the exempted final product that is supplied to M/s NEPC India Limited. When the finding of fact is that the imported inputs were used by the assessee in respect of exempted goods as well as the goods cleared on payment of duty, the Tribunal came to hold that it is a case falling under Rule 6(3)(b) of the CENVAT Credit Rules, 2001/2002/2004. Once there is a finding of fact that the case of the first respondent falls within the provisions of Rule 6(3)(b) of the CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall pay an amount equal to ten per cent of the total price, excluding sales tax and other taxes, if any, paid on such goods, of the exempted final product charged by the manufacturer for the sale of such goods at the time of their clearance from the factory. If the inputs are exclusively used in the manufacture of exempted goods, then, the provisions of Rule 6(1) would apply. But when there is a specific finding on fact that the inputs had been used by the assessee in respect of exempted goods as well as the goods cleared on payment of duty, the department's plea that the 16 components in Serial Nos.1 to 16 were used exclusively as inputs in the manufacture of exempted goods, fails and there is no dispute by the Revenue on this finding of fact. Once it is held that the assessee did not opt to maintain separate account of inputs intended both for use in the manufacture of exempted final product and of dutiable final product and has opted to pay to the Revenue such amount as provided under Rule 6(3)(b) of the CENVAT Credit Rules, they are entitled to avail the CENVAT credit. On a reading of Rule 6(1) and Rule 6(3), we also find that the assessee in this case, who had opted not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has not availed CENVAT credit on the inputs used exclusively in the manufacture of exempted final product. On the contrary, the finding of the Tribunal, which is not disputed by the department, is that the inputs have been used in the manufacture both in respect of exempted goods as well as goods cleared on payment of duty without maintaining separate accounts. Since we have held that it is a case falling under Rule 6(3)(b), Rule 6(1) does not get attracted to the facts of the present case. Therefore, the second question is also answered against the Revenue and in favour of the assessee. 10. In our view, the third substantial question of law is totally misconceived. Nevertheless, we hold that a question of law need not be framed on a decision of the Tribunal only on the ground that it has not reached finality. On the contrary, it has been now pointed out that the decision rendered by the Tribunal at Delhi in Life Long Appliances Ltd., v. Commissioner of Central Excise, Delhi-III, 2000 (123) ELT 1110 (Tri.Delhi) on an identical issue was tested before the Supreme Court in Civil Appeal No.5660 of 2000 at the instance of Commissioner of Central Excise, New Delhi and the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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