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TMI Blog2015 (12) TMI 1391X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/08 when the capacity of their power plant was increased, the appellant started using the off gases in the boiler alongwith furnace oil for generation of steam. The steam generated is partly used for generation of electricity and partly is sold, as such. The electricity generated is also partly used in the factory for manufacture of carbon black and the surplus electricity is sold outside. The steam generated is mentioned in the Notification No. 4/06-CE (Sl. No. 31) as falling under Chapter 28 of the Tariff and is fully exempt from duty. Sub-heading 27100000 of the Central Excise Tariff covers "electrical energy" but no rate of duty is specified under this heading. Department was of the view that both electricity and steam which are being sold out by the appellant are "exempted goods" within the meaning of this term as defined Rule 2 (d) of the Cenvat Credit Rules, 2004 and since common Cenvat credit availed services have been used in or in relation to manufacture of dutiable final product (carbon black) and exempted final product (steam and electricity) in respect of clearances of steam and electricity, an amount of 5%/10% of the sale value would be payable under Rule 6 (3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .f. 01/4/11, Cenvat credit in respect of Rule 6 (5) services has not been taken, that third category of services are those services like Telecom Services, IT Services, Audit, Courier Service, Manpower Supply Services, repair and maintenance services etc., that the Revenue has not given any break up for these three services, that in respect of the services which are exclusively used in the manufacture of carbon black and the services covered by Rule 6 (5) the provisions of Rule 6 (3) would not be applicable, that the provisions of Rule 6 (3) would be applicable only in respect of the third category of services - IT Service, Courier Service and manpower supply service etc., that in respect of these services, the appellant had offered to reverse the Cenvat credit at the time of adjudication, but their request was rejected by the Commissioner on the ground that subsequent reversal of the Cenvat credit would not exempt them from the provisions of Rule 6 (3), that this view of the Commissioner is incorrect as w.e.f. 01/3/08 the provisions of Rule 6 (3) have been amended with retrospective effect giving a manufacturer an additional option to reverse the proportionate Cenvat credit in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Rule 6 (3) has been calculated @ 50% and in some cases, percentage at higher than the 10% that the correct amount in the show cause notice dated 01/7/11 is Rs. 2,83,90,851/- and not Rs. 4,79,59,088/-, that this shows that the orders have been issued without any application of amount and in view of the above, the impugned orders are not correct. 4. Shri R.K. Gupta, the learned DR, defended both the orders by reiterating the findings of the Commissioner. Shri Gupta cited the judgment of Hon'ble Bombay High Court in the case ofCommissioner vs. Nicholas Piramal (India) Ltd. reported in 2009 (244) E.L.T. 321 (Bom.) and pleaded that since the appellant have used common Cenvat credit availed input services for manufacture of dutiable as well as exempted final products and have not maintained separate account and inventory of the same, the provisions of Rule 6 (3), would become applicable and they have no option to reverse the proportionate credit subsequently. He, therefore, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions from both the sides and perused the records. 6. The appellant in their factory manufacture Carbon Black, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such services the provisions of Rule 6 (2) readwith Rule 6 (3) would not apply. We agree with this contention of the appellant that if certain services are exclusively used in or in relation to manufacture of Carbon Black Rule 6 (2) would not apply. The second category of the service according to the appellant are those which are covered by Rule 6 (5) of Cenvat Credit Rules, 2004 and in respect of these services, the Cenvat credit was being taken upto 31/3/11. In respect of these services also the provisions of Rule 6 (2) readwith Rule 6 (3) would not apply. According to the appellant the third category of services are Telecom, IT Service, Audit, Courier, Manpower Supply etc. which can be said to have been used for the whole plant. However, the grievance of the appellant is that the Department has not distinguished between the three type of services. On going through the impugned order, we find that this is so, as the Commissioner had not made any distinction between the services which according to the appellant had been used exclusively for manufacture of Carbon Black, services covered by Rule 6 (5) and the other services. In respect of first two category of services, the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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