TMI Blog2019 (2) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... y in such cases where the exempted goods is manufactured wholly from the inputs which are exclusively used in the manufacture of such exempted goods. However, in the present case some of the inputs are common which were used in the manufacture of dutiable final product as well as exempted goods, therefore, the explanation II is not applicable in the present case. Moreover, the explanation II is applicable only with reference to Rule 6(2), however the appellant have not opted for said Rule and they have opted for sub Rule (3) of Rule 6 wherein unambiguous provision for payment of 6% / 8% of the value of exempted goods is provided. It is apparent that there is no exclusive input which were used in only exempted goods, for this reason also the demand applying Rule 6 (1) and (2) will not sustain - Since various consumables inputs were used in the manufacture of exempted goods well as dutiable goods, the option of payment of 8% / 10% was held correct. Time limitation - Held that:- The department was well aware about the entire working of the appellant as with reference to payment of 6% / 8% the appellants were issued SCN disputing the valuation, therefore, there is no suppression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iginal, the appellant have filed the present appeal. 2. Sh. Saurabh dixit Ld. Counsel for the appellant submits that the appellant availed the cenvat credit not only in respect of inputs supplied by M/s SEL and used exclusively in the exempted goods but also some other inputs such as, Zinc, furnace Oil, consumable, certain grades of angle, channel, etc. in the manufacture of exempted goods. These goods were commonly used for manufacture of exempted goods as well as dutiable goods, accordingly, they have rightly followed the procedure envisaged under Rule 6(3)(i) of the Cenvat Credit Rules, 2004 and paid 6% / 8% of the value of exempted goods. He submits that once an amount of 6% / 8% under Rule 6(3)(i) has been paid then no further demand of cenvat credit can be made. He submits that the impugned order confirms the demand of credit as opposed to the 6% / 8% amount already paid solely on the basis of some statement of appellant s employees regarding storage of Suzlon related goods in factory, invokes Rule 6(1) (2) of the cenvat credit Rules, 2004 to deny the credit of duty paid on inputs received on behalf of M/s SEL by the appellant. There is no dispute that common inputs were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt under Rule 6(3)(i) and other for denying total credit itself under Rule 6(1) of Cenvat Credit Rule, 2004. For this reason the demand is also patently time barred. Consequently the penalty also does not survive. 5. Shri. Amit Mishra, Ld. Joint Commissioner (AR) appearing on behalf of the appellant reiterates the finding of the impugned order. He submits that as per explanation-II Rule 6(3)of Cenvat Credit Rules, it is clear that credit shall not be allowed and input service used exclusively for the manufacture of exempted goods in provision of exempted service, therefore, the demand of Cenvat Credit confirmed, used exclusively for manufacture of exempted final is correct and legal. 6. We have carefully considered of the submissions made by both the sides and perused the records. We find that the appellant have admittedly availed option of 6% / 8% of the value of the same exempted goods which is subject matter of the present case also. The whole case of the department is that since certain inputs supplied by SEL to the appellant were exclusively used for manufacture of final product on behalf of M/s SEL and cleared under exemption the credit on such inputs is not available. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of output service shall pay an amount equal to six percent, of value of the exempted services; or (ii) the manufacturer of goods or the provider of output service shall pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of exempted goods or for provision of exempted services subject to the conditions and procedure specified in sub-rule (3A). Explanation I.- 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 of exempted goods or provision or provision of exempted service. 7. From the plain reading of the sub-Rule(1) and sub-Rule (2) it can be seen that firstly if a manufacturer is manufacturing exempted goods in that case he shall not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason also the demand applying Rule 6 (1) and (2) will not sustain. The appellant has correctly followed the provision of Rule 6(3)(i). This very issue has been considered by this Tribunal in the case of Mukul Tanks and Vessels (P) Ltd. (supra) wherein the Tribunal has passed the following order: 8. From the above judgment it can be seen that since various consumables inputs were used in the manufacture of exempted goods well as dutiable goods, the option of payment of 8% / 10% was held correct. As regard the limitation, we find that the department was well aware about the entire working of the appellant as with reference to payment of 6% / 8% the appellants were issued SCN disputing the valuation, therefore, there is no suppression of fact on the part of the appellant. Accordingly, the demand for the extended period beyond normal period is also not sustainable. As per our above discussion which is also supported by the above judgment, we are of the considered view that after payment of 6% / 8% in terms of Rule 6(3)(i), no demand for cenvat credit will sustain. Accordingly, the impugned order is set aside. The appeal is allowed. (Pronounced in the open court on 12.02.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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