9911796707
TMI Blog2008 (2) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... , Cement and Ductile Iron Pipes. All these items are dutiable. They are having separate divisions for the manufacture of these three excisable products. The raw materials for the manufacture of DI Pipes are Pig Iron and Cement. During the period from April 2004, February 2005, the respondents availed exemption for the Pig Iron and Cement manufactured by them under notification 67/95 and captively consumed for the manufacture of DI Pipes. The DI Pipes were partly cleared on payment of duty and partly cleared on exemption. The point at issue is whether the Commissioner was correct in allowing the benefit of exemption notification 67/95 to the respondents. A show cause notice was issued to the respondents holding that the exemption 67/95 is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this, even Rule 6 of Cenvat Credit Rules is not applicable. The learned Departmental Representative reiterated the grounds of appeal. 4. Shri G.P. Sastry, learned Advocate, appeared on behalf of the respondents. We heard both sides. 6. It is seen that the appellants manufacture Pig Iron, Cement and also DI Pipes, which are all excisable and dutiable. The point at issue is whether the benefit of Notification 67/95 is available to the Cement and Pig Iron manufactured by the respondents and used in the manufacture of DI Pipes. It is seen that these DI Pipes are partly cleared on payment of appropriate duty and partly without payment of duty by availing the benefit of exemption under notification 6/2002-C.E., dated 1-3-2002 as amended and No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in the Schedules to the Central Excise Tariff Act, 1985 (5 of 1986) or additional duty of excise leviable thereon which is specified in the First Schedule to the said Special Importance Act. Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty, other than those goods which are cleared- (i) to a unit in a Free Trade Zone, or (ii) to a hundred per cent Export Oriented Undertaking, or (iii) to a unit in an Electronic Hardware Technology Park, or (iv) to a unit in a Software Technology Park, or (v) under notification No. 108/95-Central Excise, da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has ignored the fact that when the respondent cleared the DI Pipes on the basis of exemption notification, they had also paid 10% / 8% of the sale value of the exempted goods in terms of Rule 6 of Cenvat Credit Rules for a part of the period and for the remaining period under dispute the respondent had kept separate accounts of inputs used in dutiable final products and exempted final products. In other words, the respondent had discharged the obligation prescribed in Rule 6 of Cenvat Credit Rules, 2002. In such cases, they would be covered by the notification in terms of exception to proviso in Para (vi). This point has been ignored by the Revenue while issuing the show cause notice. The Commissioner has recorded a clear finding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire goods cleared including the exempted goods. Because, by following Rule 6 they had paid 10% of the sale value of the exempted goods. However, when they maintain the separate inventory and accounts of the inputs used for dutiable DI Pipes and exempted DI Pipes they discharge the obligations under Rule 6. In those cases where they maintain separate accounts, they are not taking any credit of input. Here, the original inputs are the inputs for the manufacture of Pig Iron and Cement. On these inputs, the appellants tax Cenvat credit and manufacture Pig Iron and Cement. The Pig Iron and Cement are further inputs used for the manufacture of DI Pipes. There is no question of availing any credit on Pig Iron and Cement used for DI Pipes as exem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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