TMI Blog2017 (1) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... ade and commerce who is required to be saddled with the burden of duty without being able to claim any set-off. Such person is the ultimate consumer of the product. The privilege that accompanies payment of specified tax or duty on exempted goods or services under CENVAT Credit Rules, 2004 is intended to ensure that convenience is afforded to manufacturers or service providers who may, owing to some exemption that they may not be interested in claiming, be, yet, compelled to implement administrative measures of separate accounts that are be too cumbersome. On non-excisable goods, the purchaser is not denied the option of paying duty. Consequently, appellant has rightly been denied the facility of payment of the deemed tax/duty to avail C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo streams of production, logistical problems compelled them to avail the CENVAT credit on inputs used in common with the attendant obligation to discharge duty liability at 8% on exempt goods to comply with CENVAT Credit Rules, 2002. 2. However in May 2003, the assessee was directed to pay the difference between CENVAT credit taken on MS wire and the 8% paid by them on MS wire made out of duty-paid MS wire. Following issue of show cause notice, duty demand of ₹ 3,98,962 was confirmed under rule 12 of CENVAT Credit Rules, 2002 read with section 11A of Central Excise Act, 1944 along with interest, and penalty imposed under section 11AC of Central Excise Act, 1944. Penalty of ₹ 50,000 was also imposed on Shri KR Bedmutha, Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products from MS wires is not manufacture and, in any case, the end product is not leviable to duty. The broader MS wires are procured from the market. The issue that arises is whether a product that is not covered by Central Excise Act, 1944 is exempt goods within the meaning of CENVAT Credit Rules, 2002. The said rule 2 stipulates that (d) exempted goods means goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to Nil rate of duty; 7. It is the claim of Learned Counsel that the specification of excisable goods in the definition of exempt goods made its appearance only with CENVAT Credit Rules, 2004 and, hence, the argument of excisable as a pre-qualification i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exempted goods or services under CENVAT Credit Rules, 2004 is intended to ensure that convenience is afforded to manufacturers or service providers who may, owing to some exemption that they may not be interested in claiming, be, yet, compelled to implement administrative measures of separate accounts that are be too cumbersome. On non-excisable goods, the purchaser is not denied the option of paying duty. Consequently, appellant has rightly been denied the facility of payment of the deemed tax/duty to avail CENVAT credit. 10. Learned Counsel submits that there was no intention to evade duty in adopting the facility of payment of tax of 8% and that there has been no suppression or wilful misstatement on the part of appellant which woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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