TMI Blog2007 (5) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 14 of Cenvat Credit Rules read with Rule 6(3)(p) of Cenvat Credit Rules 2004 and a penalty of ₹ 1,00,000/- under Section 11A of CE Act. 2. The appellants are engaged in the manufacture of excisable goods falling under Chapter heading 3815 of CET Act 1985. The goods falling under Chapter 15 are exempted from payment of duty during the budget 2005. They availed Cenvat credit on inputs and the input services used in the manufacture of final products. The department after scrutiny of ER returns for the months from March 05 to January 06 have observed that the assessee had availed and utilized the credit of duty on the inputs, capital goods and input services under the provisions of Cenvat Credit Rules 2004. The department was of the view that during the period March 05 to January 06, as they had cleared quantity of 314160.229 MTs of exempted goods falling under Chapter 15 of CET Act 1985 by using inputs as well as input services as they had not maintained separate records for receipts and utilization of such inputs and input services for the manufacture of dutiable and exempted goods, Therefore, it was alleged in the show cause notice that they were required to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs CCE, Hyderabad - Final Order Nos. 1518 and 1519/2005 dated 26.8.2005. Reliance is also placed on this Bench's order rendered in CCE Visakhapatnam vs Deccan Sugars - 2006 (199) ELT 529 (Tri-Bang) and Tube Investments of India Ltd., vs CCE Madurai - (2004 (177) ELT 880 (Tri-Chennai.) The learned Counsel submits that it is difficult to understand as to how such huge duty amount could be confirmed when reversal was only ₹ 26 ,59,546 /-. He submits that the Revenue has not given the work out of the duty amount arrived at by them which is astronomical in figures. He submits that this amount cannot be arrived at all. The matter was placed for hearing stay application on 29 th March 07. The matter was heard and stay order No 294/07 was passed which is as follows: The stay application is taken up for hearing. The matter was heard and prima facie case was made out by the appellants. Therefore, the Miscellaneous Order No. 54/2007 dated 13.2.2007 granting interim stay of the matter was granted. Para 2 of the interim stay order is reproduced herein below, which refers to the citations given by the learned Sr. Counsel. 2. The learned Senior Counsel submits that on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard both sides in the matter. We find that the appellants have already reversed ₹ 26 ,59,546 /- along with interest. The only plea taken in this pare-wise comments is that they are liable to pay 10% of the value of the goods, as they have not maintained separate accounts. On this point, the learned Sr. Counsel relied on large number of judgments to show that once the credit has been reversed, then the question of demanding 10% of the value of the goods does not arise. We have gone through the Para-wise comments and the submissions made by the learned Counsel. We notice that the issue is prima facie covered by the following judgments. (i) K.G . Denim Ltd. vs . CCE, Salem - 2005 (189) ELT 424 (Tri.-Chennai.) (ii) M/s. Hetero Drugs Ltd. vs . CCE, Hyderabad - Final Order Nos. 1518 and 1519/2005 dated 26.08.2005. (iii) CCE, Visakhapatnam vs . Deccan Sugars - 2006 (199) ELT 529 (Tri.-Bang.) (iv) Tube Investments of India Ltd. vs . CCE, Madurai - 2004 (177) ELT 880 (Tri.-Chennai). In all the above noted judgments, the ruling of M/s. Chandrapur Magnet Wires (P) Ltd. has been applied. The contention raised by the Commissioner in the Para-wise comments does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be sustained. We allow the appeals with consequential relief. There is also no jurisdiction for invoking the extended period as the fact of reversal of the Modvat credit had been intimated to the department in ER I Return. Both the appeals are allowed. Learned counsel also refers to the judgements of this bench rendered in Siripur Paper Mills vs CCE (supra). The finding recorded in para 6 of this order is also reproduced herein below. 6. We have gone through the records of the case carefully. The fact that appellant used common inputs for both the dutiable and exempted goods is not in dispute They are also not maintaining separate accounts for the inputs used in dutiable and exempted goods. Under these circumstances, they are covered by Rule 57CC /Rule 6. However, it is seen that 95% of the goods produced are cleared, on payment of duty and 5% are cleared at nil rate of duty. The appellants submit that the credit attributable to exempted final products has already been reversed. The dutiable demand at 8% is ₹ 2.69 crores However, the credit attributable to exempted goods is only ₹ 4.29 lakhs . We also feel that such a demand over ₹ 2 crores when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derogation to provisions of the Act or Rules thereof. [ Pahwa Chemicals Pvt. Ltd. v. CCE, Delhi - 2005 (151) E.L.T . 339 (SC.)]. Further reversal of the credit before or prior to the removal of the goods would be sufficient to satisfy the condition of the Notification as held in the following, decisions: Andhra Pradesh Paper Mills Ltd. v. CCE - 2005 (185) E.L.T . 371 (Tri.-Bang.) Grasim industries Ltd. v. CCE, Indore 2005 (66) RLT 363 (CESTAT-Del). Wearwell Tyre and Tubes Inds . Pvt. Ltd. v. CCE - 2004 (165) E.L.T . 409 (Tri.-Del.) Bharat Earth Movers Ltd. v. CCE, Bangalore - 2001 (136) E.L.T . 225 (Tri.-Bang.) CCE, Mumbai, VII v. Pearl Polymers Ltd. - 2003 (158) E.L.T . 775 (Tri.-Mumbai) Final Order No. 1260/2004 dated 21.7.2004 of CCE v. M/s. AVN Enterprises, Bangalore passed by SZB at Bangalore 5. The learned Departmental Representative reiterated the orders of the lower authority. 6. We have gone through the records of the case carefully. Even though the appellants have not maintained separate accounts, they have reversed the credit taken and attributable to the goods cleared free of duty before the removal of the goods from the factory. The Chandrapur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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