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Asian Pre-Lam Industries Pvt. Ltd. Versus Commissioner of Central Excise, Belapur

2018 (1) TMI 481 - CESTAT MUMBAI

CENVAT credit - input/input services - non-maintenance of separate records - whether the appellant herein had followed the provisions of Rule 6(3) and (3A) of the said Rules correctly or otherwise? - Held that: - the provisions of Rule 6(3) specifically indicate that an assessee if he is opting not to maintain separate account shall follow the options given under the said sub-rule - In the case in hand, the appellant herein had exercised their option of not maintaining separate account and follo .....

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filing of an intimation every year. - Both the lower authorities have not disputed the calculation done by the appellant in the case in hand. Having not disputed the said calculation and there being no contest to such reversal undertaken by the appellant confirming the demand of an amount of equivalent to 6% of the value of the trading activity only on the ground that the appellant has not filed the intimation every year seems to be not in consonance with the law and needs to be set aside. .....

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order to conduct their business, they have availed the benefit of cenvat credit in respect of the inputs and input services. The inputs and input services are common for both manufacturing as well as trading activity. The appellant herein had filed an intimation regarding exercising option under Rule 6(3A) of the Cenvat Credit Rules, 2004 (hereinafter referred to as the Rules) on 7th October 2013 informing the Superintendent of Central Excise in charge of the Range as to their intention of reve .....

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the said Rules has contravened the provisions and hence having not maintained separate records, is required to reverse an amount equivalent to 6% of the value of the trading activity undertaken by them. The appellant contested the show cause notice on merits before the adjudicating authority. The adjudicating authority, after following due process of law, confirmed the demand raised along with interest and also imposed penalty. Aggrieved by such an order, an appeal was preferred before the first .....

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had given the intimation regarding exercising the option of not maintaining the separate account reversing an amount of cenvat credit attributable to the trading activities and draws my attention to the monthly returns filed during the period in question in this appeal and submits that they have reversed the amount as provided under the provisions of Rule 6(3A) of the said Rules. He would draw my attention to the provisions of Rule ^93) and 6(3A) and submits that they have followed the procedure .....

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that the appellant has not kept separate account of the common input services and has also not exercised the option to pay an amount equivalent to the cenvat credit attributable to common input services used in or in relation to the trading activity (exempted service); that the appellant has failed to exercise the option under Rule 6(3A) of the said Rules as per the format provided in clause (a) of sub-rule (3A) of Rule 6 of the said Rules and thereby contravening the provisions of Rule 6(3A). I .....

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n had followed the provisions of Rule 6(3) and (3A) of the said Rules correctly or otherwise. In order to appreciate the same, it is relevant that the said provisions are reproduced as under:- (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 fiv .....

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If the manufacturer of goods or the provider of output service, avails any of the option under this sub-rule, he shall exercise such option for all exempted goods manufactured 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 .....

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hall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely:- (i) name, address and registration No. of the manufacturer of goods or provider of output service; (ii) date from which the option under this clause is exercised or proposed to be exercised; (iii) description of dutiable goods or taxable services; (iv) description of exempted goods or exempted services; (v) CENVAT credit of inputs and input services lying in balance as on the date of exerc .....

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ount as determined under sub-rule (3A). The said sub-rule (3A) specifically lays down the procedure that needs to be followed by the assessee and the one of the main procedures is in clause (a) wherein an option needs to be exercised by the manufacturer/assessee. In the case in hand, the appellant herein had exercised this option on 7th October 2013 itself. It is the case of the Revenue that the appellant has to exercise this option every year. Both the lower authorities have come to a conclusio .....

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