TMI Blog2018 (3) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... ances it cannot be said that all the inputs are for exclusive use in exempted final products. The Rule 6 (1) and Rule 6 (3) (b) both cannot be applied in case of such clearances. Demand of ₹ 64,40,555/- made on the ground that they have used common inputs and hence liable to pay 8%/10% amount in terms of Rule 6 (3) (b) eventhough they have maintained the separate account and the proportionate credit was reversed by them at the time of clearance - Held that: - where the Appellant has reversed the proportionate credit and has also maintained separate accounts of inputs used in such exempted goods, they cannot be forced to pay the amount in terms of Rule 6 (3) (b). It is apparent from the record that the major item i.e MS Plates and HR sheets account was separately maintained and in case of common inputs the credits were proportionately reversed. Further in terms of retrospective amendment to rule 6 of the Cenvat Credit Rules by Section 73 of the Finance Act, 2010 as long as the assessee reverses the proportionate cenvat credit, the same is considered as sufficient compliance with Rule 6 - demand not sustainable. Demand u/s 11D - Held that: - the show cause notice has nowh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount of ₹ 63,18,782 and ed. Cess of ₹ 1,21,773/- in terms of Rule 6 (3) (b). It was proposed to recover the said amount of ₹ 64,40,555/- in terms of Rule 6 (3) (b) read with rule 14 of Cenvat Credit Rules, 2004. Also an amount of ₹ 48,56,589/- was proposed to be recovered in terms of Section 11D on the ground that the same was reversed in terms of Rule 6 (3) (b) for the clearances during the period Feb 2004 to May 2004 and from June 2004 to Dec 2004 but was wrongly recovered from the customers. The demands alongwith penalty were confirmed against the Appellant by the adjudicating authority and hence the present appeals. 2. Shri Prakash Shah, Ld. Advocate appearing for the Appellant submits that in respect of demand of ₹ 1,01,25,986/- the adjudicating authority has erred in passing the impugned order as the HR coils and MS Plates of different sizes or thickness are used in the manufacture of various excisable goods cleared both on payment of duty as well as under exemption and are thus common inputs. They have rightly took the credit and reversed an amount equal to 8% or 10% of the sale value of the final product cleared under exemption noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumables. He submits that once the credit is reversed there cannot be any demand of 8/10% on the sale price of exempted goods. That if they are made liable to reverse the amount equal to 8/10% of the value of the goods in that case they are eligible for the credit reversed by them. 4. As regard demand under section 11D on the ground of recovery of 8/10% amount recovered from their customer, the Ld. Counsel submitted that the said amount is not recoverable from them as held in case of Unison Metals Ltd. - 2006 (204) ELT 323 (TRI - LB) and Wipro GE Medical Systems Pvt. Ltd. - 2016 (337) ELT 51 (Kar.). He further submits that the demands are time barred as well as the penalty is not imposable in case of demand of 8%/10% made under Section 11D. 5. Shri Ajay Kumar, Ld. Additional Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He also relies upon the Board Circular No.754/70/2003-CX dt. 09.10.2003 to state that credit is not available on inputs used exclusively in exempted final products. He also relies upon the Board Circular No.599/36/2001-CX dt. 12.11.2001 that in case of reversal of 8% amount if the same is represente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05 and not prior to that in view of fact that the notification itself states that it will come into force from the date of its publication in the Official Gazette. This view is supported by the CEGAT decision in the case of Ester Industries and Apex Court decision in the case of C.C.E. v. Associated Cement Company and Kerala High Court decision in the case of CIT v. S.K. Srinivasan (cited supra). Accordingly it is held that the appellants are entitled to take credit on non-common inputs upto the date when explanation III came into force. The demand involved is for the period Jan 2004 to April 2005 and hence the above judgment is squarely applicable. In above circumstances the Board Circular dt. 09.10.2003 is not applicable to facts of the present case. We thus hold that the demand of ₹ 1,01,25,986/- is not sustainable. 7. Coming to the next demand of ₹ 64,40,555/- we find that the said demand has been made against the Appellant on the ground that they have used common inputs and hence liable to pay 8%/10% amount in terms of Rule 6 (3) (b) eventhough they have maintained the separate account and the proportionate credit was reversed by them at the time of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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