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M/s Gujarat Guardian Ltd Versus Commissioner of Central Excise

2017 (11) TMI 764 - CESTAT AHMEDABAD

CENVAT credit - whether the appellant after discharging 10% of the value of the exempted products for the quarter 01.04.2008 to 30.6.2008 can choose/opt to follow the alternate option of reversal of Cenvat Credit availed on inputs attributable to exempted products for the remaining period of nine months ie., from 01.07.2008 to 31.03.2009? - Held that: - Sub Rule (3)of Rule 6 of CCR, 2004 reveals that an assessee shall follow either of the options as applicable to him prescribed under Clause .....

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e, the appellant availed the option by discharging 10% of the value of the exempted products for the initial quarter ie., from 01.04.2008 to 30.6.2008 for which no procedure has been prescribed for exercising such option, whereas to follow reversal of proportionate Cenvat Credit on inputs availed and attributable to exempted products, the detailed procedure is prescribed under Sub Rule 3A of CCR, 2004. Therefore, the appellant once exercised its option for the first quarter by discharging 10% of .....

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reduced to ₹ 10,000/-. - Appeal allowed in part. - Appeal No. E/927/2011 - ORDER No. A/13310 / 2017 - Dated:- 31-10-2017 - Dr D. M. Misra, Hon'ble Member ( Judicial ) For the Applicant : Shri S J Vyas, Advocate For the Respondent : Shri Sameer Chitkara, Authorised Representative ORDER Per : Dr D.M. Misra, This is an appeal filed against OIA-BC/108/SURAT-II/2011 dt 24/05/2011 passed by the Commissioner of Central Excise, Customs and Service Tax (Appeals) -SURAT-II. 2. Briefly state .....

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proportionate credit availed on the inputs attributable to the exempted products. Later on 01.07.2008 they addressed a letter to the Dept., exercising option, under Sub Rule (3A) of Rule 6 of the CCR, 2004 to reverse proportionate credit availed on inputs attributable to exempted products. Alleging that the appellant cannot change their option during the same financial year, demand notice was issued for recovery of differential amount with interest and penalty. On adjudication, the demand was co .....

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. It is his contention that they had exercised their option for the first time in the financial year 2008-09 w.e.f 01.07.2008 and they did not change their option during the same financial year. Therefore, continuation of discharge of 10% of the value of the exempted products in the initial days of the introduction of the said sub Rule 3(A) i.e. from 01.4.2008 to 30.06.2008 cannot be construed as exercising option under amended Rule 6(3) of the CCR, 2004. In support, he has referred to the judgm .....

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availed the first option by discharging 10% value of the exempted products for the first quarter from April 2008 to June 2008, therefore, in view of the explanation to Clause (ii) of Sub Rule 3 of Rule 6 of CCR, 2004 the appellant is debarred from switching over to Sub Rule 3(A) of CCR, 2004, during the same financial year ie., 2008-09. In support, the Ld. AR referred to the judgment of this Tribunal in the case of M/s Jubilant Life Sciences Ltd vs CCW, Pune 2016.TIOL.2026.CESTAT.Mum. 5. Heard .....

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reads as below: (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow either of the following options, as applicable to him, namely:- (i) the manufacturer of goods shall pay an amount equal to ten per cent of value of the exempted goods and the provider of output service shall pay an amount equal to eight per cent of value of the exempted services; or (ii) the manufactur .....

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by him or, as the case may be, all exempted services provided by him, and such option shall not be withdrawn during the remaining part of the financial year. Explanation II.- For removal of doubt, it is hereby clarified that the credit shall not be allowed on inputs and input services used exclusively for the manufacture of exempted goods or provision of exempted service. 9. A plain reading of the said provision reveals that an assessee shall follow either of the options as applicable to him pre .....

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. In the present case, the appellant availed the option by discharging 10% of the value of the exempted products for the initial quarter ie., from 01.04.2008 to 30.6.2008 for which no procedure has been prescribed for exercising such option, whereas to follow reversal of proportionate Cenvat Credit on inputs availed and attributable to exempted products, the detailed procedure is prescribed under Sub Rule 3A of CCR, 2004. Therefore, the appellant once exercised its option for the first quarter b .....

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