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2016 (8) TMI 387

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..... his option in writing then the appellant is bound to pay the duty amount calculating under the first option. According to me, this argument is devoid of merit, because the said Rule does not say anywhere that on failure to intimate, the manufacturer/service provider would lose his right to avail second option of reversing the proportionate credit. Sub-Rule (3A) is only a procedure contemplated for application of Rule 6(3). Consequently, the argument of Revenue is that the appellants exercising option is mandatory and on its failure, the appellant has no other option but to accept and apply Rule 6(3)(i) and make payment of 5%/10% of the sale price of the exempted goods or exempted services is not acceptable, because the Rule does not lay dow .....

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..... lants is a partnership concern inter alia engaged in the manufacture of cranes/crane un-loaders, crane bridges and trollies and crane stares falling under the Chapter Heading 84 of the Central Excise Tariff Act. The appellant cleared two cranes at nil rate of duty vide invoice dated 17.10.2008 and 13.11.2008 by availing the benefit of Notification No.33/2005-C.E. dated 8.9.2005 as amended vide Notification No.38/2005-C.E dated 30.12.2005. During the audit, an objection was raised requiring the appellant to pay 10% of the amount as per Rule 6(3) of CENVAT Credit Rules (CCR), 2004 on the ground that the appellant herein had not maintained separate books of accounts and also did not exercise the option as provided in Rule 6(3) read with Rule 6 .....

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..... ld in the impugned order is hit by limitation/time bar as the charges of suppression cannot be sustained at all as the appellant has disclosed the clearance of two cranes in their periodical ER1 returns and the demand could not have been made by alleging suppression and invoking the extended period of limitation, particularly when the whole issue pertains to interpretation of requirement/conditions as contained in Rule 6 of CCR, 2004. He also submitted that the show-cause notice in this case has been issued only on 13.3.2012 (for the reversal of pro rata credit with interest already made and communicated on 31.7.2010 itself) which would be beyond the normal period of limitation in support of this submission, he relied upon the following dec .....

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..... ices which is intended for manufacture of dutiable goods or providing exempted services. Sub-rule (iii) of Rule 6 speaks about the situation where such manufacturer or service provider does not maintain separate accounts. The Rule provides for two options. This Rule was amended vide Notification No.10/2008-C.E. (NT) dated 1.3.2008 w.e.f 1.4.2008. As per the new Rule, the manufacturer or service provider opting not to maintain separate account has to follow either of the following two option: a) A manufacturer shall pay 10% (5% w.e.f. 07/07/2009) of sale price of the exempted goods and an output service provider shall pay 8% (6% w.e.f. 07/07/2009) of the value of the exempted services; or b) Reverse the credit on inputs and input servi .....

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..... tion in Rule 6(3A) to intimate the Department is only a procedural one and that such procedural lapse is condonable and denial of substantive right on such procedural failure is unjustified. Therefore keeping in view the facts and evidence on record, the demand raised by the Revenue is not legal and proper. Moreover, the demand raised by the Revenue is also hit by limitation as the appellant reversed the pro-rata credit with interest on 31.7.2010 itself and communicated to the Department whereas the show-cause was issued only on 13.3.2012 which is beyond the period of one year and the allegation of the Department regarding suppression of fact is also not tenable because the appellant has disclosed these facts in their periodical ER1 returns .....

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