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2016 (7) TMI 1112 - CESTAT HYDERABAD

2016 (7) TMI 1112 - CESTAT HYDERABAD - TMI - Cenvat Credit - assessee was reversing/paying an amount equal to 10% of the value of the exempted goods as provided under Rule 6 (3) (b) of CENVAT Credit Rules. Department was of the view that appellant was using HR plates exclusively for manufacture of exempted goods and therefore contravened Rule 6 (1) of CCR, 2004 by availing credit on HR plates which were used for making exempted goods only. - Held that:- The Tribunal held that law provides c .....

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and PSCC pipes and are availing facility of CENVAT Credit on inputs. The appellants were manufacturing both dutiable as well as exempted goods. On perusal of ER-I returns, it was found that appellants were taking credit on all inputs for use in the manufacture of exempted and dutiable goods, paying duty at applicable rates on dutiable goods, paying duty at applicable rates on dutiable goods and reversing/paying an amount equal to 10% of the value of the exempted goods as provided under Rule 6 (3 .....

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proposing to demand an amount of ₹ 45,18,163/- being the irregular credit along with interest and also proposing to impose equal amount of penalty. 2. After due process of law, the original authority confirmed the demand, interest and imposed equal amount of penalty. In appeal, the Commissioner (Appeals) upheld the order. Hence the appellant is before me. 3. On behalf of the appellant, the learned consultant Sh. P. Dwarakanath submitted that the appellant had used common inputs for manufa .....

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ure of exempted products only. He explained that appellants are manufacturing MS pipes, which are in and out coated with Mortar and embedded with MS wire mesh. These MS pipes are used for supply of water for human consumption by M/s Hyderabad Metro Water Supply and Sewerage Board. The inputs used are MS plates/HR plates, cement, MS wire mesh and electrodes. The department on verification of some invoices concluded that HR plates supplied by M/s IVRCL are used exclusively for pipes of exempted ca .....

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(220) ELT 510 (Tri-Chennai)] Tahe Ali Indus & Projects (P) Ltd. Vs CCE, Hyderabad [2006 (195) ELT 225 (Tri Bang)] Heideberg Prominent Fluid Controls India (P) Ltd. Vs CCE & ST. Bangalore [2015 (321) ELT 282 (Tri-Bang)] 4. Refuting the above, the learned AR, Sh. Guna Ranjan supported the findings in the impugned order. He submitted that the HR plates used for manufacturing exempted pipes was identifiable separately. Therefore, appellants ought not to have availed credit on these inputs. .....

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d to department dated 07.06.2007, the appellants have denied this and stated that inputs used for manufacture of dutiable and exempted goods are one and the same. The department has arrived at the conclusion that the HR plates of certain the specification was used only in exempted goods on basis of verification of invoices, and on the basis of specification of size of the cleared goods. Para 14 of the show cause notice reads as under : It is also seen from the ER-I returns and RG-1 extracts subm .....

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