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TMI Blog2007 (10) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Revenue proceeded against the appellants that in terms of Rule 6 of the Cenvat Credit Rules, the appellants have to pay 8% /10% of the sale value of the exempted goods which are acid oil and wax. This is the dispute. In the pre sent case, the appellants reversed the entire Cenvat credit attributable to the in puts used in the exempted products along with interest. According to the Revenue, in terms of the Rules, the appellant is bound to pay 8%/10% of the sale value of the goods. The lower authority confirmed a demand of Rs. 37,16,263/- along with interest. The appellants approached the Commissioner (Appeals). The Commissioner (Appeals) in the impugned order confirmed the order of the lower authority. Hence, the appellants have come before us for relief. 3. Shri K. S. Ravi Shankar and Shri A.R.J. Nayak, learned Advocates appeared on behalf of the appellants. Ms. Sudha Koka learned SDR appeared for the Revenue. 4. We heard both sides. The main thrust of the argument of the appellant is that Rule 6 is not applicable in respect of by-products. In support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how to us that the decision of the Larger Bench is per incuriam and sub silentio. He quoted the authorities of Salmond on Jurisprudence to show that when the particular decision of a Superior Court has not been taken into account, then the decision of the sub ordinate court would be held as per incuriam and sub silentio. The learned Advocate pointed out that even after the Rallies decision, this Bench has decided certain cases wherein it was held that the Rule 6 of the Cenvat Credit Rules would not be applicable in respect of the by-products. The said cases are M.K Agrotech (P) Ltd. . CCE, Mysore - 2007 (211) E.L.T. 550 (T); Copy of the Final Order No.1987 dated 28-11-2006 in the case of M/s. Ravindra Solvent Oils Pvt. Ltd.; M/s. JSW Steel Ltd. v. CCE - 2006 (204) E.L.T. 313 (T) = 2006 (4) S.T.R. 481 (T); JSW Steel Ltd v. CCE - 2006 (205) E.L.T. 896 (T). Reliance was also placed on the decision of the Tribunal in the case of CCE v. Rajaram Solvex Ltd. - 2006 (200) E.L.T. 606 (T). 4.2 It was further pointed out by the learned Advocates that the appellants had reversed the entire credit attributable to the exempted products along with interest. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty on the inputs utilized in the manufacture of exempted final products. In other words, a reversal of credit would amount to not taking the credit at all. The ratio of this decision has been followed by this Bench in several cases. In the present case, even though the credit attributable to the exempted product is only Rs. 2,66,535/- the 8% comes to an exorbitant amount of Rs. 37,16,263/-, it is somewhat of the order of 13 to 14 times the credit attributable to the exempted products. It would be really unjust to demand such anenormous amount when the credit attributable to the exempted product is only a paltry sum of Rs. 2,66,535/-. Moreover, the learned Advocate cited a Board Circular dated 16-10-2001, wherein it has been clearly held that when separate account is not maintained and when 8% of the sale value is not paid, it has been stated that the recovery of credit attributable to the exempted product would be in order. Circular: 591/28/2001-CX dated 16-Oct-2001 Recovery of amounts not duty paid under provisions of Rule 6 of Cenvat Credit Rules, 2001 &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovery of 'amounts' which are not duty paid under the provisions of Rule 6 of the Cenvat Credit Rules, 2001 (Rule 57CC of the erstwhile Central Excise Rules, 1944) - clarification regarding. I am directed to say that a doubt has been raised regarding legal provisions for recovery of amount not paid by an assessee in terms of the provisions of Rule 6 of the Cenvat Credit Rules, 2001 (Rule 57CC of the erstwhile Central Excise Rules, 1944). 2. The matter has been examined in the Board. It is stated that the basic principle underlying the CENVAT scheme is that credit is admissible if duty is paid on final products. Attention is drawn to sub-rule (1) of Rule 6 of the Cenvat Credit Rules, 2001, which clearly provides that Cenvat credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods, except in circumstances specified in sub-rules (2). The provisions of sub-rules (2) and (3) of Rule 6 provide as to how to deal with and account for the inputs and credit of duty in cases where the inputs are used in manufacture of both dutiable a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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