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M/s. Thiru Aarooran Sugars Ltd. Versus CCE & ST, Trichy

2017 (9) TMI 1248 - CESTAT CHENNAI

CENVAT credit - manufacture of taxable as well as exempt goods - non-maintenance of separate records - Rule 6 (3) (a) of CCR, 2004 - case of appellant is that they have reversed more than the credit than what ought to have been paid by them as per Rule 6 (3) (a) of CCR, 2004, therefore nothing further is required to be paid by them in terms of reversal of cenvat credit. - Held that: - It is consistently agreed upon in the SCNs that the appellants had reversed such credit, however, while cons .....

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ntire quantum of Cenvat credit required to be reversed as indeed been reversed, the matter is remanded for denovo adjudication. - Penalty u/r 15 of CCR - Held that: - Rule 15 of the said Rules contains provisions for confiscation and penalty in cases where Cenvat credit in respect of input or capital goods or input services has been taken or utilized wrongly - During the impugned period, provision for imposition of penalty equal to the wrongly taken or used cenvat credit was applicable when .....

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Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri S. Muthu Venkataraman, Advocate for the appellants Shri A. Cletus, ADC (AR) for the respondent ORDER Per: Bench 1.1 The facts of the case are that the appellants were availing Cenvat credit on inputs and input services and manufacturing final products viz., Sugar, Molasses, which are chargeable to duty as well as exempted/non-excisable goods. (Extra Neutral Alcohal (ENA)/rectified spirit). It appeared that they were not maintaining .....

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te: January 2006 to June 2006 Amount: ₹ 6,32,781/- proposed to impose penalty under Rule 15 of the Cenvat Credit Rules 2004. 2. SCN No. 15/31/2007 dated 29.08.2007 Period of dispute: August 2006 to June 2007 Amount: ₹ 56,87,961/- proposed to impose penalty under Rule 15 of the Cenvat Credit Rules 2004. 3. SCN No. 15/43/2008 dated 28.07.2008 Period of dispute: July 2007 to April 2008 Amount: ₹ 86,43,514/- along with interest and penalty under Rule 15 of CCR 2004. 1.2 After due p .....

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araman, made oral submissions which can be summarized as follows:- i) The appellants have followed Rule 6 (3) (a) of the CCR 2004. ii) The appellants are manufacturers of sugar and molasses. They were paying appropriate duty on the clearance of sugar and with regard to the production of molasses which was used for the manufacture of exempted products, the appellants availed benefit of Notification No. 67/95. iii) Revenue has erred in assuming that credit is solely applicable to molasses and the .....

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by the appellants are inclusive of input service credit. v) The appellants had already reversed more the credit than what ought to have been paid by them as per Rule 6 (3) (a) of the CCR 2004. Therefore, nothing more needs to be paid by them and hence the imposition of penalty is not maintainable. 3. On the other hand, Ld. AR, Shri A. Cletus, ADC, appearing on behalf of Revenue supports the adjudication. He further submits that for the period January 2006 to July 2006, appellant while considerin .....

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t is seen that the appellants have contended during the hearing that they have reversed more than the credit than what ought to have been paid by them as per Rule 6 (3) (a) of CCR, 2004, therefore nothing further is required to be paid by them in terms of reversal of cenvat credit. The appellants do not contest the requirement of reversing credit attributable to the exempted or non-excisable final products. It is also not the allegation that the appellants did not make any reversal of such credi .....

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(3) (a) of the Rules. 5.3 We are of the considered opinion that such an averment would require to be verified. Accordingly, for the limited purpose for causing verifying the claim of the appellant that the entire quantum of Cenvat credit required to be reversed as indeed been reversed, the matter is remanded for denovo adjudication. In case, this claim of the appellant is found correct, no further demand will arise in respect of Cenvat credit required to be reversed attributable to inputs used i .....

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re was sufficient balance as on the date of reversal of credit. 5.4 Coming to the matter of penalty, it is seen that in both the impugned orders, penalty equal to the tax liability determined has been imposed, under Rule 15 of CCR. 5.5 We find that Rule 15 of the said Rules contains provisions for confiscation and penalty in cases where Cenvat credit in respect of input or capital goods or input services has been taken or utilized wrongly. During the impugned period we find that provision for im .....

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