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TMI Blog2016 (2) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal vide order No. A-10-11/Kol/2009 dated 6/01/2008 allowed the assessee's appeal and dismissed the Department's appeal. Aggrieved by the said order, the Department preferred an appeal before the Hon'ble High Court of Jharkhand at Ranchi. The Hon'ble High Court by its order dated 14th September, 2012 set aside the Order of the Tribunal and directed to decide both the appeals afresh. Consequently, the appeals are taken up for disposal. 4. Briefly the fats of the case are that the appellant were engaged in the manufacture of Glass and Glasswares falling under Chapter Sub-Heading 701500 of CETA, 1985 which were cleared on payment of duty as well as without payment of duty claiming exemption. In the manufacture of said final products, commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Advocate Dr. Samir Chakraborty for the applicant has submitted that the demand has been confirmed against the appellant solely on the ground that the appellant did not maintain separate account for receipt, consumption and inventory of inputs in accordance with the provisions of Rule 6(2) of CENVAT Credit Rules. It is his contention that from the very beginning, the show cause notices had been issued alleging that the CENVAT Credit on inputs were not admissible as no separate inventory, records etc. were maintained for the manufacture of dutiable as well as exempted goods. It is his contention that before availing CENVAT Credit on the inputs, the appellant had addressed two letters dated 11th March, 2003 and 20th March, 2003 informing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2010, whereby proportionate credit has been allowed to be reversed with interest. He submits that in the present case the applicant had availed proportionate credit only to the extent of inputs were used in or in relation to the manufacture of dutiable goods and they have never availed CENVAT Credit on inputs used in the manufacture of exempted products. Hence only for back ward calculation of the proportionate credit, attributable to dutiable goods cannot be said that the condition stipulated in Rule 6(2) had not been complied with. 8. The Ld. Advocate has also submitted that the Ld. Commissioner of Central Excise (Appeals), Ranchi vide Order-in-Appeal No. 76/RAN/2007 dated 1/08/2007 allowed the appeal of the appellant setti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld formation, which was called for as per the direction of this Tribunal, it is categorically stated that the appellant had availed proportionate credit only to the extent of use of inputs in or in relation to the manufacture of dutiable final products. Further, he submits that the reduction of demand by the Commissioner in the de novo order is incorrect. It is his contention that the ld.Commissioner has erroneously reduced the liability to the extent of Rs. 22,46,401/- on the ground that CENVAT Credit had not been taken on exempted inputs, which is irrelevant to the dispute. He submits that reduction of this amount from the total value of Rs. 77,07,145.93, is therefore incorrect. 11. Heard both sides and perused the records. The present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, after calculating proportionate use of inputs in the production of the dutiable final products. From the said report dt.09.07.2015, which also refers to an earlier report of the divisional officer dated 27.02.2007, it is clear that the appellant had not availed CENVAT Credit on the inputs that had gone into the manufacture of exempted final products, but availed proportionate credit on that quantity of inputs that were used in the manufacture of dutiable final products only. The dispute centers around the methodology/formula adopted by the appellant, in arriving at the quantity of inputs and proportionate credit availed, on the manufacture of dutiable final products. The departments contention is that no separate physical inventory ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 09.07.2015. Hence, other issues raised by the Revenue about wrong calculation, reduction of demand etc. become irrelevant and accordingly not dealt with. Further, we find that for the subsequent period the department has accepted the formula adopted in availing the credit on inputs attributable to dutiable products and dropped the demands. In the result, the impugned order is set aside to the extent of confirming demand of Rs. 6,59,516/- and imposition of penalty of Rs. 3.00 Lakhs with interest and accordingly the assessees appeal is allowed. Revenue's appeal being devoid of merit, consequently dismissed. Appeals are disposed off as above.
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