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2016 (3) TMI 198 - CESTAT MUMBAI

2016 (3) TMI 198 - CESTAT MUMBAI - TMI - Cenvat Credit - Non maintaining of separate accounts - extended period of limitation invoked - inputs used in the manufacture of finished goods cleared on payment of duty and for inputs used in the manufacture of exempted finished goods as required under Rule 6(2) of the Cenvat Credit Rules - Held that:- Assessee has attached various correspondence along with their written submissions which show that the respondent has been maintaining separate records wi .....

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ndent has shown by production of their registers and documents that they have been separately maintaining records with regard to most of the inputs. Further, the demand pertains to the period May 2004 to September 2005 and the show cause notice was issued on 1.7.2008 i.e. after a period of four years, wherein the respondent in a number of letters exchanged between them and the department, clearly stated regarding the availment of exemption and maintenance of accounts and furnishing of the requir .....

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ER The present appeal has been filed by the department against the order of the Commissioner (Appeals), dated 24.5.2010 whereby the learned Commissioner (Appeals) has set aside the order-in-original dated 31.3.2009. 2. Briefly the facts of the case are that the respondent is engaged in the manufacture and clearance of excisable goods falling under Chapter 68 of the Central Excise Tariff Act, 1985. During the course of audit of the records of the assessee during January-February 2006 and January .....

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ithout payment of duty under Notification No.10/97-CE dated 1.3.1997 and Notification No.6/2002-CE dated 1.3.2002 during the said period. Thereafter a show cause notice dated 11.7.2008 was issued to the respondent for demand of duty and interest amounting to ₹ 7,88,366/- and also proposed a penalty under Section 11AC of the Central Excise Act. The respondent filed reply before the Joint Commissioner and denied the allegations contained in the show cause notice by giving specific instances .....

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the order of the Joint Commissioner. Now the department has filed the present appeal. 3. The learned AR submitted that the order of the Commissioner (Appeals) is not proper and legal and is therefore liable to be set aside on the ground that while passing the impugned order, the Commissioner (Appeals) has ignored the provisions of Rule 6(3)(b) in force at the relevant time, according to which the assessee has no option except to pay duty @ 10% of the amount of the value of exempted goods, where .....

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also submitted that the Commissioner (Appeals) has wrongly relied upon the judgment of the Hon ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. vs. CCE, Nagpur reported in 1996 (81) ELT 3 (SC). He further submitted that in the present case, the judgment of the Hon ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. (supra) is not applicable as the facts in the present case are different. He also submitted that the judgment of the Hon ble Supreme Court in Chandrapur .....

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ersal of credit on dutiable inputs used in the manufacture of exempted goods and also discussed the maintenance of separate accounts. The Commissioner (Appeals) has also specifically held that the assessee has submitted details of invoices under which the required quantity of resin was procured by them for manufacture of the exempted goods. The details of the said invoices and the quantity procured were mentioned in RG-23A Part II account and the monthly cenvat returns submitted to the range off .....

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nt has not been able to controvert the same by any cogent evidence. He also submitted that the respondent reversed the cenvat credit attributable to exempted goods before the issue of show cause notice and therefore it tantamounts to as if no credit has been taken and in support of this he cited the following case laws:- (i) Pepsico India Holdings Ltd. reported in 2008 (228) ELT 452 (T); (ii) Pepsico India Holdings Pvt. Ltd. reported in 2015-TIOL-1744-HC-MAD. The learned counsel also submitted t .....

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aintaining separate accounts. In this respect, the relevant portion of the Commissioner (Appeals) s order is reproduced below:- The main contention of the appellant in this regard is that in respect of eight consignments of finished exempted goods sold under eight invoices mentioned in the show cause notice, they had not availed any cenvat credit on the inputs used for their manufacture. These goods were known as Compestos and were exempted under Notification No.10/97. The impugned order has con .....

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exempted goods. The details of the said invoices and the quantity procured were mentioned in RG23A Part-I account and the monthly cenvat returns submitted to the Range office as evident from the photocopies of the acknowledged return copies annexed in the appeal. In respect of credit taken on inputs used for manufacture of goods fully exempted under Notification No.64/95-CE dated 16.3.1995, the appellants had taken cenvat credit and subsequently reversed it before clearance of exempted final pro .....

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