TMI Blog2016 (3) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be reversed. In view of the above, it is seen that no option under Rule 6 (3) can be imposed on the appellant and the appellants offer of availing the option of proportionate credit in terms of Rule 6 (3) (ii) cannot be denied to them. However, they will be liable to pay interest on the amounts which are reversed. The order-in-original is set aside and the matter is remanded to Commissioner to calculate the amount required to be reversed and the interest payable thereon. - Appeal No. E/220/12 - - - Dated:- 4-2-2016 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri. SS Gupta, CA For the Respondent : Shri. Ajay Kumar, Jt. Comm. (AR) ORDER PER: RAJU 1. The appellants are manufacturer of excisable goods. Some of the goods are exempted from payment of duty and are chargeable to nil rate of duty. The appellants were availing Cenvat credit on input services which were used for both excisable goods as well as other goods which were chargeable to nil rate of duty. The appellants availed a total credit of ₹ 54,01,113/- during the period July 2008 to June 2009. Since the appellant has not maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undo the effect of the input credit taken in respect of exempted goods. The learned Counsel argued that they are ready to pay the interest on the delayed reversal of credit, if any. 3. The learned AR relies on the impugned order. He argued that the language of the Rule is plain and simple and the Commissioner in his order has relied of the same. He also relied on decision of Honble Supreme Court in the case of Ind Swift to assert if any other option under Rule 6 (3) is given, the appellant should also discharge liability of interest. 4. We have considered the rival submissions. 5. We find that it is an admitted fact that the appellants have availed credit amounting to ₹ 54,01,113/-. It is not disputed by Revenue that for some of these services in respect of which credit has been taken fall under Rule 6 (5) of the Cenvat Credit Rules and in respect of those credit has to be allowed irrespective of the facts that same are used in the production of exempted goods. 5.1 The tribunal in the case of Mercedes Benz India Pvt. Ltd. (supra) has observed as follows: 5.1 We have observed that in Rule 6(3) prevalent at the relevant time, two options have been provided :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3A) of Rule 6, therefore to fulfill the condition, assessee should pay the said amount, which has been complied by the appellant. 5.2 As regard the delay in payment, if any, the appellant have discharged the interest liability on such delay. Regarding the compliance as provided under Clause (a) of sub-rule (3A) of Rule 6 the appellant while exercising this option is required to intimate in writing to the Jurisdictional Superintendent, Central Excise, the following particulars namely : (i) Name, address and registration No. of the manufacturer of goods or provider of output service; (ii) Date from which the option under this clause is exercised or proposed to be exercised; (iii) Description of dutiable goods or taxable services; (iv) Description of exempted goods or exempted services; (v) Cenvat credit of inputs and input services lying in balance as on the date of exercising the option under this condition. As per the submission of the appellant and perusal of their letter along with enclosed details, it is found that more or less all these particulars were intimated to the Jurisdictional Superintendent. The appellant has been filing their return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verse proportionate ineligible credit in terms of Rule 6 (3) (ii) of the Cenvat Credit Rules has merit. 5.1 It is seen that in the case of Maize Products (supra) the Honble High Court of Gujarat has observed as follows: 5. The appellant has produced relevant extracts from the relevant Rule of Cenvat Credit Rules, 2002 which relates to obligation of manufacturer of dutiable and exempted products. Under sub-rule (2) of the said Rules, a manufacturer is required to maintain separate accounts regarding inputs used for manufacturing of dutiable products and inputs used for manufacturing of exempted products. However, sub-rule (3) stipulates that, in a case where the manufacturer opts not to maintain separate accounts, the manufacturer shall follow either condition (a) or condition (b), as the case may be. Under the Rule, Explanation-I provides that the amount mentioned in any of the conditions shall be paid by the manufacturer by debiting the Cenvat credit or otherwise. 6. Thus, in effect, the directions issued by the Tribunal are merely in consonance with the requirement of the relevant rule, and it is not possible to state that the Tribunal has committed any error in issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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