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S.M. Shankarrao Mohite Patil SSK Ltd. Versus Commissioner of Central Excise, Pune-III

2015 (3) TMI 1094 - CESTAT MUMBAI

Reversal of CENVAT Credit - appellant did not follow the Rule 6 for the inputs received before 1.3.2002 but reversed 8% of the value of the exempted products - Held that:- In the case of a manufacturer who is manufacturing the dutiable as well as exempted goods, he has an option to keep a separate record for the inputs used in the manufacture of dutiable goods and separate record in respect of the inputs used in the manufacture of exempted goods. In case the manufacturer is not maintaining separ .....

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uired to pay an amount equivalent to the cenvat credit attributable to the inputs used in or in relation to the manufacture of such final products at the time of clearance from the factory. Availing the credit when the inputs are received is one action. The liability to pay an amount in respect of the exempted goods has nothing to do with the date of taking the credit. On the contrary, it is the date of clearance of the final products - all these claims have been made for the first time at the T .....

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Shri Gajendra Jain, Advocate For the Respondent : Shri V.K. Shastri, Assistant Commissioner (AR) ORDER Per: P.K. Jain Brief facts of the case are that the appellant is engaged in the manufacture of sugar, molasses, denatured ethyl alcohol, undenatured alcohol, acetic acid etc. During the manufacturing process, molasses emerges, which is captively used by them in their factory for further manufacture of their other products. In addition, they are also buying molasses from other manufacturer avail .....

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pted final products. The appellant did not follow the said Rule for the inputs received before 1.3.2002 but reversed 8% of the value of the exempted products. The appellant was issued two show cause notices and the demands were confirmed vide order-in-original dated 25.2.2004. The appellant filed appeal against the said order before the first appellate authority who, after hearing the case, dismissed the appeal. Aggrieved by the said order, the appellant is before us. 2. The appellant has also f .....

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h they have done and, therefore, no further liability remains. In support of his contention, the learned counsel quoted this Tribunal s Larger Bench decision in the case of CCE, Rajkot vs. Ashok Iron & Steel Fabricators reported in 2002 (140) ELT 277 (Tri.-LB) which has been affirmed by the Hon ble Supreme Court as reported in 2003 (156) ELT A212 (SC). The learned counsel also quoted the Larger Bench decision of this Tribunal in the case of HMT vs. CCE, Panchkula reported in 2008 (232) ELT 2 .....

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clearance from the factory. The learned AR also submitted that this obligation came into effect on 1.3.2002 and the date of receipt of the inputs or the credit taken is irrelevant for determination of the issue. 4.1 As far as the miscellaneous application is concerned, the learned AR stated that none of these claims were made in reply to the show cause notice or before the first appellate authority and in view of this position, the miscellaneous application should not be admitted and the appell .....

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falling within Chapter 27 of the said First Schedule used in the generation of electricity; (iii) Naphtha (RN) falling within Chapter 27 of the said First Schedule used in the manufacture of fertilizer; (iv) tyres of a kind used on animal drawn vehicles or handcarts, and their tubes, falling within Chapter 40 of the said First Schedule; (v) newsprint, in rolls or sheets, falling within heading No. 48.01 of the said First Schedule; (vi) final products falling within Chapters 50 to.63 of the said .....

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acturer for the sale of such goods at the time of their clearance from the factory. Explanation I - The amount mentioned in conditions (a) and (b) shall be paid by the manufacturer by debiting the CENVAT credit or otherwise. Explanation II. - If the manufacturer fails to pay the said amount, it shall be recovered along with interest in the same manner, as provided in rule 12, for recovery of CENVAT credit wrongly taken. 5.1 It would be seen that in the case of a manufacturer who is manufacturing .....

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02 vide clause (a), certain goods have been excluded from the benefit of scheme of 8%. It is not under dispute that the goods falling under Heading 22.04 were produced by the appellant and were excluded from the said scheme. Thus, from 1.3.2002 onwards, the manufacturer was required to pay an amount equivalent to the cenvat credit attributable to the inputs used in or in relation to the manufacture of such final products at the time of clearance from the factory. Availing the credit when the inp .....

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