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TMI Blog2008 (4) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,85,23,739/-, Rs. 2,15,94,748/-, the amounts demanded in the three show cause notices under Rule 12 of Cenvat Credit Rules, 2002 read with Section 11A of Central Excise Act, 1944. He also directed the appellants to pay interest thereon in terms of Rule 6 read with rule 12 of Cenvat Credit Rules, 2002 read with Section 11AB of Central Excise Act, 1944. The amount of Rs. 1,12,52,762/- which was credit reversed by the appellants at the time of clearance of the finished goods, was appropriated towards the sum due in terms of Rule 6 of Cenvat Credit Rules, 2002. 3. The issue involved in the instant appeal is whether the provisions of Rule 6 (3) (b) of the Cenvat Credit Rules, 2002 are applicable or not, when the amount equivalent to the Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 739/55/2003-CX dated 28.8.2003; 4. 858/16/2007-CX dated 8.11.2007 6. The appellants relied upon the following case laws in support of their claim that if the credit taken on the inputs used in the manufacture of exempted goods is reversed before the clearance of the goods, they are not required to pay an amount equal to eight per cent of the price of such goods under Rule 6 (3) (b) ibid. 1. Dharamasi Morarjee Chemical Co. Ltd. vs. CCE, Jaipur reported in 2001 (44) RLT 441 (Tri-Mum); 2. Rochees Watches Ltd. vs. Commissioner of Customs, Jaipur reported in 2003 (152) ELT 420 (Tri-Del) 3. Tribunal's Final order no. A/328/WZB/2005/C.I dated 21.4.2005 in the appellants' own case for the earlier period 7. The Revenue on the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed final product, if the input credit taken in respect of exempted final product is reversed, in the case law reported in para (d), although a stay order, it has been held that Rule 57CC (9) of erstwhile Central Excise Rules, 1944 prescribing for maintenance of separate inventory has no provision for any reversal of credit. We note that most of the case laws, which have held that the reversal of credit will suffice in lieu of payment of 8%/10% amount, have relied upon the Supreme Court judgement in the case of Chandrapur Magnet Wires Pvt. Ltd. vs. CCE, Nagpur reported in 1996 (81) ELT 3 (SC) . 9. We reproduce below the provisions of Rules 6 (1), 6 (2) and 6 (3) of the Cenvat Credit Rules, 2002, with which we are concerned in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid First Schedule; (v) newsprint, in rolls or sheets, falling within heading No. 48.01 of the said First Schedule; (vi) final products falling within Chapters 50 to 63 of the said First Schedule, the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs used in, or in relation to, the manufacture of such final products at the time of their clearance from the factory; or (b) if the exempted goods are' other than those described in condition (a), the manufacturer shall pay an amount equal to eight per cent. of the total price, excluding sales tax and other taxes, if any, paid on such goods, of the exempted final product charged by the manufacturer for the sale of such goods at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le price in terms of the principle laid down by the Supreme Court in Chandrapur Magnet case cited supra does not appear to be correct since the judgement of the Supreme Court in the case of Chandrapur Magnet was delivered in the context of Rule 57C of the erstwhile Central Excise Rules, 1944 when the provisions of Rule 57CC, 57AD of the erstwhile Central Excise rules, 1944 and rule 6 of the Cenvat Credit Rules, 2001/2002 were not in the statute book. Hence, the Supreme Court did not have the occasion to consider these provisions. The true ratio of the Supreme Court judgement in Chandrapur Magnet case is to the effect that if it is permissible to reverse the modvat credit taken, then on reversal of the credit taken, the benefit of the exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub rule 3 (b) of the said rule. If the appellants have consciously chosen to disregard the clear and unambiguous provisions of Rule 6, which are not capable of two interpretations, they have done so at their own peril and they cannot plead clemency and mercy later on in the name of equity and pray for relieving them of the liability to pay 8% of the price of the exempted goods. There is no reason why the rigours of law should not be given effect to. 11. Since there are contrary views of the coordinate Benches of the Tribunal and the Rule position as stated above is unambiguous and clear, we deem it appropriate to refer the subject matter to the Larger Bench of the Tribunal to resolve the conflict. The registry is directed to submit the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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