TMI Blog2008 (7) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajak, SDR, for the Appellant. Shri P.G. Mehta, Advocate, for the Respondent. [Order] - During the visit to the respondent's factory on 12.3.05, the Central Excise officers found that the respondent availed cenvat credit on inputs purchased by themselves like Methanol, Spent Sulphuric Acid, HDPE bags used in the manufacture of H.Acid for principal manufacturer, in addition to the raw materials supplied by various parties for manufacture of H.Acid. As per the provisions of Cenvat Credit Rules, 2004, no Cenvat credit can be allowed on quantity of input or input services used in the manufacture of exempted final product or chargeable to Nil rate of duty. Offence case was registered against the respondent on the ground that they had w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision. Revenue has come up in appeal against this order. 2. The learned SDR on behalf of the Revenue stated that the Larger Bench decision has been appealed against and once a decision has been appealed against, its finality and correctness are in jeopardy and it does not have any precedent value. In support of this argument, he relies upon the decision of the Tribunal in case of CCE Chennai-II v. BOC India Ltd. 2007 (212) E.L.T. 222 (Tri-Chennai), and UOI v. West Coast Paper Mills Ltd. 2004 (164) E.L.T. 375 (S.C.). 3. On the other hand, the learned advocate on behalf of the respondent submits that the decision will not loose its precedent value just because an appeal has been filed. 4. There is no dispute that the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit." 5. What the Hon'ble Supreme Court saying is that there is no finality to the judgment. Nowhere, the Supreme Court says that it should not be followed. Similarly, the decision of the Tribunal cited by the learned SDR is also not very helpful to the Revenue's case. The relevant paragraph is reproduced below for better appreciation. "4. After examining the submission, we find that learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed without any discussion on merit. Thererfore, if merits are found that the Larger Bench decision is applicable to the facts and there are no reasons to differ from the decision, I do not find that any authority is precluded from the relying on the decisions appealed against and pass an appropriate order. Before proceeding further, Rule 6(1) Rule 6(2) of Cenvat Credit Rules are reproduced below. "(1) The cenvat credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or exempted services, except in circumstances mentioned in sub-rule (2). Provided that the Cenvat credit on inputs shall not be denied to job worker referred to in Rule 12AA of the Central Excise Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed goods manufactured on job work basis. The fact that the amount has to be calculated shows that separate accounts were not maintained. Once separate accounts are not maintained, Rule 6(2) is attracted and therefore, the exempted goods have to be cleared on payment of amount specified under Rule 6(3)(b) of Cenvat Credit Rules if the exempted goods are other than those described in Rule 6(3)(a). In fact, Rule 6(1) specifically provides that cenvat credit is not allowed except in circumstances mentioned in sub-rule (2) which is maintaining of separate accounts. On this ground also, the demand for cenvat credit fails. I am in full agreement and respectfully follow decision of the Larger Bench wherein it was held that goods manufactured on jo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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