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TMI Blog2016 (10) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming exemption under Notification No. 4/2006-CE dated 01.03.2006 (Sl. No. 47B.). However, they did not reverse the CENVAT Credit availed on inputs used for manufacture of these goods. A Show Cause Notice was issued to the assessee demanding Rs. 1,92,000/- representing 5% of the value of the exempted goods under the provisions of Rule 6(3)(i) and 6(2) of CENVAT Credit Rules, 2004, along with interest and also proposing to impose Penalty, alleging that as per Rule 6 (3) (A) appellant ought to have reversed the credit as common inputs were used for dutiable and exempted goods; and appellant did not maintain separate accounts. 2. After due process of law, the Original authority confirmed the demand, interest and imposed penalty. In appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard both sides. The impugned demand is made for the reason that appellant cleared both dutiable and exempted goods using common inputs on which credit was taken without maintaining separate accounts as provided in Rule 6(2) of CENVAT Credit Rules, 2004. The crux of the issue is whether the goods cleared under chapter X procedure without payment of duty would fall within the category of exempted goods. The issue has been analysed in various judgments as under: 6. In Aureola Chemicals Ltd V/s. CCE, Indore [2004 (175) ELT 148 (Tri-De) the Tribunal held that the spent Sulphuric Acid cleared by assessee under Chapter X procedure to various manufacturers of fertilizers against CT-2 certificate without payment of duty are not exempted goods. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10.As discussed above, the goods cleared under Chapter X Procedure are neither exempted goods nor said to be chargeable to Nil rate of duty as the recipient of the goods are duty bound to use these goods for specified purpose and, if, the goods are not used for specified purpose, goods are liable to duty. In this situation, the goods cleared under Chapter X Procedure cannot be said to be exempted from whole of the duty or are chargeable to Nil rate of duty. In view of the above discussion, the impugned order is set aside and the appeal is allowed. 7. In Hindustan Zinc Ltd V/s. UOI [2008 (223) ELT 149 (Raj)] the Honourable High Court of Rajasthan had occasion to consider whether the legality of the demand raised for the reason that appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit of duties paid on such inputs used by him in the manufacture of his product. Such date is date of receipt of inputs in the factory. 8. The Co-ordinate Bench of the Tribunal in the case of CCE, Indore Vs S.R.F Ltd., [2008 (223) ELT 508 (Tri-Del)] held the issue in favour of assessee. This order of the Tribunal was upheld by the Apex Court [2010 (255) ELT A13 (s.C.)] dismissing the civil appeal filed by department. Again, the Tribunal in the case of Tristar Equipment Private Ltd., (supra) relied upon the judgement passed in S.R.F. Ltd and held that the demand raised alleging that pre-fabricated construction and stationary pre-cooling equipments cleared without payment of duty on the strength of C.T-2 certificate cannot be considered as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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