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2015 (10) TMI 107 - CESTAT BANGALORE

2015 (10) TMI 107 - CESTAT BANGALORE - TMI - Denial of CENVAT Credit - Non maintenance of separate accounts - whether the appellant has maintained separate accounts as required under Rule 6(2) of CENVAT Credits Rules 2004 - Held that:- matter deserves to be remanded to the original adjudicating authority who is to verify the submissions of the appellant that they were maintaining separate accounts in terms of Rule 6(2) of CENVAT Credit Rules and liability of payment of duty under Rule 6(3) of CE .....

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ate For the Respondent : Shri Ajay Saxena, Commissioner(AR) ORDER Per : ASHOK K. ARYA Both the sides have been heard in detail. 2. The matter concerns with the obligation under Rule 6(2) of CENVAT Credit Rules, 2004 on the manufacturer assessee who is producing both types of goods viz. dutiable as well as non-dutiable / exempted i.e. goods attracting nil rate of duty. In this case, the appellant had been manufacturing both the dutiable items viz. paper tags, labels, paper cartons and the non-dut .....

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heck their said separate accounts. The learned advocate for the appellant Shri M.A. Narayan says that the statement recorded by the Department in this regard on 09/07/2008 was clarified by them on 24/10/2008 through a letter wherein they have clearly stated that the accounts in respect of the dutiable goods were maintained and they were stored as far as possible to one side of the storage area and they had the records for the utilisation for the said CENVAT credit availed goods. The learned advo .....

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ow cause notice, quoted above, it cannot be said that the appellants have not maintained the accounts in respect of cenvated inputs and non-cenvated inputs. What was necessary for the authorities to ascertain from his account, whether it discloses the accounts pertaining to the receipt, consumption and inventory of the inputs used in the manufacture of dutiable products separately from those used in the manufacture of exempted products. Indeed, the impugned order nowhere discloses any such exerc .....

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sed in the manufacture of exempted goods. Though, apparently, the said findings have been arrived at without analyzing the accounts and ascertaining, whether the same discloses separately the receipt, consumption and inventory of the inputs utilized in the manufacture of dutiable products from those utilized in exempted goods products. In the absence of such exercise, in our considered opinion, the authority was not justified in arriving at the conclusion that the only option open for the appell .....

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redit Rules has not been followed and the appellant has to pay 10% of the value of the exempted goods as the duty of Central Excise. The learned AR has referred to the decision of CESTAT, Mumbai in the case of R.R. Paints Pvt. Ltd. Vs. CCE, Mumbai [2013(288) ELT 289 (Tri. Mumbai)] saying that when the appellant availed input credit for both dutiable as well as exempted products and did not maintain separate accounts, they were required to pay as per the provisions of Rule 6(3) of CENVAT Credit R .....

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ter dt. 24/10/2008, they clarified that they were maintaining accounts in respect of dutiable goods but the Department instead of verifying their submission of 24/10/2008 issued them a show-cause notice on 24/08/2009 and thereafter adjudicated the show-cause notice confirming the demand of duty of ₹ 7,10, 227/- along with interest and imposing equivalent amount of penalty which was confirmed by the Commissioner(Appeals) also by an order dt. 25/01/2012. 7. The learned advocate for the appel .....

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