TMI Blog2018 (9) TMI 1578X X X X Extracts X X X X X X X X Extracts X X X X ..... s recovered from the buyers - the decision squarely applies to the present case and that demand confirmed under Section 11 D of Central Excise Act, 1944 is set aside. CENVAT Credit - Whether appellants were eligible to take Cenvat credit on molasses received in the distillery division after payment of Central Excise duty either from its sugar division or from some other factory? - Held that:- There is no dispute that molasses received in distillery division had been utilized for manufacture of final products which were dutiable as well as exempted. In terms of Rule 3 of Cenvat Credit Rules, 2004, appellants were eligible for taking credit of Central Excise duty paid on molasses so received in distillery division - appellants are eligible for Cenvat credit of Central Excise duty paid on molasses received in the distillery division. Whether appellants were eligible to take Cenvat credit of molasses purchased from other sugar factories after payment of Central Excise duty received as distillery division? - Held that:- Appellants are engaged in the manufacture of dutiable as well as exempted final products which were exempted as well as dutiable. In terms of Rule 3 of Cenvat Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, For the period 01.03.2002 to 27.02.2005, appellants were required to reverse credit on attributable basis - For the period 28.02.2005 to 20.02.2007, appellants were required to reverse the credit @ 10% of the total price of exempted final product - Again w.e.f. 21.02.2007, appellants were required to reverse credit on attributable basis. Adjudicating authority is directed to determine the amount reversible in terms of this order and the appellants shall be liable for payment of any amount found to have been short paid/reversed. We further direct that in case appellants have reversed more amount than the amount reversible in terms of this order, appellants shall be eligible for its refund as consequential relief. Appeal disposed off. - Appeal No. E/2184/2009-EX[DB] - Final Order No. 72295/2018 - Dated:- 25-9-2018 - Hon ble Mr. Anil Choudhary, Member (Judicial) And Hon ble Mr. Anil G. Shakkarwar, Member (Technical) Shri Kapil Vaish, Chartered Accountant for Appellant Shri Rajeev Ranjan, Joint Commissioner (AR), for Respondent ORDER Per: Anil Choudhary The issues involved in the above appeal are as under:- i) Whether appellants were liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thereafter a show cause notice dated 05.03.2008 had been issued proposing to demand ₹ 29.48 cr. For the period February, 2003 to March, 2007, most of the demands raised in earlier 6 notices have again been raised in the show cause notice dated 05.03.2018. 3. The aforesaid 7 show cause notices have been adjudged by the impugned order dated 30.01.2009 wherein the learned Commissioner has confirmed demand of ₹ 10,20,36,092/- and has imposed penalty of ₹ 4,63,74,691/-. Appellants have accepted the demand of ₹ 13,26,337/- on shortage of 15298 Qt sugar and are not contesting the same. The remaining amount is being contested in this appeal. During the relevant period, appellants have also reversed various amounts under Rule 6 (3) of CCR, 2004. 4.1 The learned Commissioner has confirmed the demand of ₹ 5,61,61,401/- under Section 11D after observing that the amount reversed has been mentioned in the invoice against the row meant for total duty payable hence it clearly reflect its identity as central excise duty actually charged from the customers. Therefore, in terms of Section 11D, appellant has no right to retain the said amount and are liable to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pay duty........ and has collected any amount from the buyer of any goods in any manner representing as duty of excise, shall forthwith pay the amount so collected to the credit to the Central Government has application only when equivalent duty had not been deposited at the time of removal of the goods. The scheme of the law is that manufacturers shall not collect amounts falsely representing them as central excise duty and retain them, thus, unjustly, benefiting themselves. In the present cases, (irrespective of whether the 8% payments were duty or not) since the 8% amount remain already paid to the revenue, and no amount is retained by the assessee, Section 11D has no application. 10. The real identity of the amount collected (whether excise duty payable or not) is of no relevance for Section 11D. What is relevant is only whether the collection was represented as duty of excise. The representation may as well be entirely false. The qualifying of the representation through the words in any manner makes this clear. Therefore, the contentions of both sides on the question, as to whether deposits under Rule 57CC are excise duty or not, are beside the point. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strength of not less than 95% by volume of Ethyl Alcohol. It is very clear from the observation of Hon ble Supreme Court that Ethyl Alcohol and Rectified Spirit are one and the same. We, therefore, hold that rectified spirit which is not used for human consumption is nothing but Ethyl Alcohol and is finding place in tariff Item No.22072000. 5.1 In view of our finding in the said case, we hold that the impugned Order-in-Original, wherein Cenvat Credit was denied is not sustainable in Law. We, therefore, allow the appeal. The appellants shall be entitled to consequential relief as per law. 5.3 In view of the aforesaid settled position, we hold that appellants are eligible for Cenvat credit of Central Excise duty paid on molasses received in the distillery division. 6. As already mentioned in para 5.2 above, appellants are engaged in the manufacture of dutiable as well as exempted final products which were exempted as well as dutiable. In terms of Rule 3 of Cenvat Credit Rules, 2004, appellants were eligible for taking credit of Central Excise duty paid on other inputs/input services used in distillery division. We, therefore, hold that the appellants were eligible to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earance from the factory. 7.8 We also note that w.e.f. 21.02.2007 in case of products falling under Chapter Heading 22072000, assessees were required to reverse credit attributable to input and inputs services in or in relation to manufacture of such final products. In case of other final products assessees were required to pay an amount equal to 10% of the total price excluding sales tax and other taxes, if any, paid on such goods, of the exempted final product cleared by the manufacturer for sale of such goods at the time of clearance from the factory. 7.9 In view of the legal provisions detailed above, we hold that:- i) For the period 01.03.2002 to 27.02.2005, appellants were required to reverse credit on attributable basis. ii) For the period 28.02.2005 to 20.02.2007, appellants were required to reverse the credit @ 10% of the total price of exempted final product. On the issue of valuation of rectified spirit/ENA capitevly consumed for manufacture of country liquor/IMFL, the sale price of the same shall be taken as held in appellants own case as reported in 2001 (130) ELT 93 (Tri.-Del.). iii) Again w.e.f. 21.02.2007, appellants were required to reverse credit on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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