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2016 (3) TMI 99 - CESTAT NEW DELHI

2016 (3) TMI 99 - CESTAT NEW DELHI - TMI - Liability to pay an amount equal to 10% of the value of tractors of engine capacity below 1800 CC when they have availed Cenvat credit of educational cess on common inputs without maintaining separate records - Held that:- The Original Authority observed that industrial cess and education cess being paid are in the nature of excise duty only. The appellants have to maintain separate accounts for receipt and consumption of the inputs which are common for .....

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with capacity of above 1800 CC. Education cess is payable on such industrial cess. The appellants utilized the credit of education cess availed on inputs to discharge education cess on tractors of above 1800 CC. There is no industrial cess or education cess on the tractors of below 1800 CC. Accordingly they calculated the proportionate credit of education cess availed on common inputs and reversed the same. We find there is no dispute on the fact of such reversal which has been admitted in the s .....

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ber (Judicial) And Shri B. Ravichandran, Member (Technical) For the Appellant : Shri Amit Jain, Advocate For the Respondent : Shri Govind Dixit, Authorized Representative (DR) ORDER Per B. Ravichandran :- The present appeal is against order dated 29/01/2007 of Commissioner of Central Excise, Jaipur I. The appellants are engaged in the manufacture of tractors liable to Central Excise duty. They were availing Cenvat credit of education cess paid on the inputs used by them in the manufacture of tra .....

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inputs without maintaining separate accounts for receipt and consumption of these inputs. Invoking the provisions of Rule 6 (3) (b) of Cenvat Credit Rules, 2004 proceedings were initiated against the appellant to recover 10% of value of the exempted tractors. The Original Authority vide the impugned order confirmed a demand of ₹ 2,68,25,330/- and imposed a penalty of an equivalent amount on the appellants. Aggrieved by the said order, the appellants filed this appeal. 2. The learned Couns .....

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s liability towards education cess on a tractor the present demand confirmed is for an amount of ₹ 26,000/- of Cenvat credit on inputs per tractor. The learned Counsel reiterated that demand of 10% value of exempted tractors is legally unsustainable as they have not taken any credit of excise duty on these inputs. The credit of education cess paid on inputs availed by them has also been reversed proportionate to the clearance of tractors of engine capacity below 1800 CC which do not attrac .....

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se laws in support of his submission. He submitted that reversal of proportionate credit of educational cess attributable to the tractors of less than 1800 CC capacity is sufficient compliance of the conditions of Rule 6 and there could be no further liability on the appellant. 3. The learned AR Shri Govind Dixit reiterated the findings in the impugned order. He further submitted that the appellants did not maintain separate accounts as required by the Rule 6 and reversal, if any, subsequent to .....

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s without maintaining separate records. We have perused the impugned order. The Original Authority observed that industrial cess and education cess being paid are in the nature of excise duty only. The appellants have to maintain separate accounts for receipt and consumption of the inputs which are common for different type of tractors. Since the appellants failed to do so they are liable to pay 10% of the total price of exempted final products. First of all, we noticed that in the present case .....

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ors of above 1800 CC. There is no industrial cess or education cess on the tractors of below 1800 CC. Accordingly they calculated the proportionate credit of education cess availed on common inputs and reversed the same. We find there is no dispute on the fact of such reversal which has been admitted in the show cause notice itself. In spite of such reversal, the appellants were called upon to pay an amount equal to 10% of the total price of exempted tractors invoking Rule 6 (3) (b) of the Cenva .....

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inguished the same on the ground that reversal of proportionate credit of education cess for a particular period was made much later after the clearance of exempted goods and hence the above decision will not apply. However, we find such distinction is not based on the ratio followed in various decisions. In Mercedes Benz India (P) Ltd. vs. CCE, Pune I reported in 2015 (40) S.T.R. 381 (Tri. Mumbai). The Tribunal held the Revenue could not insist the appellant to avail a particular option under R .....

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