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TMI Blog2007 (12) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... by the original authority was in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2002. Under that Rule, a manufacturer of dutiable and exempted final products, who had not maintained separate inventory in respect of inputs used in the manufacture of dutiable product and those used in the manufacture of the exempted product, was required to pay 8% of the price (excluding tax) of the exempted goods. The original authority raised such demand on the assessee in adjudication of a show-cause notice. The appellate Commissioner set it aside after holding that Rule 6(3) (b) ibid was not attracted in the case. Hence the Revenue's appeal before us. After examining the records and hearing both sides, we are of the view that the appeal itself requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of separate inventory having been maintained in respect of inputs used in the manufacture of the exempted product and those used in the manufacture of the dutiable product. Relying on this decision, it is submitted by learned SDR that, as the assessee had admittedly not maintained separate accounts in respect of Hexane [common input for the dutiable final product viz, refined oil and the exempted by product viz. de-oiled cake], they had to pay 8% of the price of the de-oiled cake in terms of Rule 6(3)(b) ibid. Learned SDR has further pointed out that, in a case involving similar set of facts, the Hon'ble President of the Tribunal sitting singly followed the Larger Bench decision in Rallies India (supra) vide Sidharth Soya Products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In other words, maintenance of separate accounts with reference to dutiable and exempted products becomes impossible. This was, perhaps, the reason why the assessee chose not to maintain separate accounts. In other words, they did not opt to operate under Rule 6(2) of the Cenvat Credit Rules. But now, can it be said that they should necessarily pay 8% of the price of the exempted product under Rule 6(3)? This provision would come into play only where a manufacturer of dutiable and exempted final products is capable of maintaining separate accounts in respect of common inputs used in the manufacture of such products but has not maintained such accounts. Here is a case where the manufacturer (respondents) was not capable of maintaining separa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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