TMI Blog2020 (3) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... geable goods and in case of non-maintaining of separate accounts, then Rule 6(3) comes into operation and as per first option the manufacturer is liable to pay 6% of the value of exempted goods. The submission that from September to 4.11.2012, WCL was only manufacturing exempted goods is merely on presumptions and the argument falls flat in view of the finding recorded by the Tribunal that on 5.11.2012 the goods were cleared on payment of duty. Without there being any manufacturing of dutiable goods prior to 4.11.2012, the goods could not have been cleared on 5.11.2012 on payment of duty. More-so, when clearance and supply of dutiable goods is accepted and there is no denial to the fact that a purchase order existed for supply of dutiable goods, on mere assumptions the intention cannot be determined or it can be concluded that the conduct was fraudulent - The authorities have also not appreciated the difference in manufacture and clearance of goods. It cannot be concluded that WCL till 04.11.2012 was indulging only in manufacture of exempted goods. No perversity has been pointed out in the order - Appeal dismissed - decided against appellant. - Central Excise Appeal No. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avail cenvat credit on inputs used in manufacturing of exempt goods? The facts are that M/s Welspun Project Ltd. (for short, 'WPL') is engaged in manufacture of M.S. Pipes, it received order of supply of pipes from GMADA on 5.3.2012. As per the condition of purchase order, the pipes were to be supplied subject to exemption under Notification No. 12/2012-CE dated 17.3.2012 and if the GMADA failed to get exemption certificate under the said notification, in that case duty was to be paid on the pipes. M/s Welspun Corporation Ltd. (for short, 'WCL') acquired a unit in July, 2012 and started manufacturing of pipes. WPL placed the order on 20.7.2012 to WCL for the pipes which were to be supplied by it to GMADA. On 20.8.2012, GMADA obtained an exemption certificate. On 5.11.2012, WPL placed another order to WCL for supply of pipes and on the supply duty was leviable. It would be worth taking note at this stage that both the orders were for supply of HSAW pipes 2250 mm D 12 mm wall thickness. The period in dispute is from September, 2012 to June, 2013 in which it was claimed by assessee that exempted dutiable goods were manufactured and supplied. The department on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of that rule. (2) Where a manufacturer or provided of output service avails of CENVAT credit in respect of any inputs or input services and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for -- (a) the receipt, consumption and inventory of inputs used-- (i) in or in relation to the manufacture of exempted goods; (ii) in or in relation to the manufacture of dutiable final products excluding exempted goods; (iii) for the provision of exempted services; (iv) for the provision of output services excluding exempted services; and (b) the receipt and use of input services-- (i) in or in relation to the manufacture of exempted goods and their clearance upto the place of removal; (ii) in or in relation to the manufacture of dutiable final products, excluding exemptted goods, and their clearance upto the place of removal; (iii) for the provision of exempted services; and (iv) for the provision of output services excluding exempted servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval or for provision of exempted services. Explanation III.-- No CENVAT credit shall be taken on the duty or tax paid on any goods and services that are not inputs or input services. Rule 6(1) states that no cenvat credit shall be allowed on the inputs used in relation to manufacture of exempted goods. Sub-rule (2) provides exception to sub-rule (1), it deals where the manufacturer or a provider of output service is involved in both dutiable as well as exempted goods or services. For availing the CENVAT credit, separate accounts are to be maintained as envisaged in clauses (a) and (b) to the sub-rule. Sub-rule (3) starts with a non-obstantate clause and contemplates the situation where separate accounts are not maintained and provides for options. As per clause (i), 6% duty is to be paid of the value of exempted goods and services; or as per clause (ii), to pay an amount as determined under subrule (3A); or sub-clause (iii) provides that a separate account is to be maintained for receipt, consumption and inventory of input as per clause (a) to sub-rule (2) and CENVAT credit can only be taken on input under sub-clauses (ii) and (iv) of clause (a) and also pay to the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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