TMI Blog2023 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice against the respondent for taking credit on any input which is solely used in exempted goods or used as common input. The notice alleged that though the party maintains separate records but not as required under Rule 6 (2) of the CCR, 2004. This view is not supported by any evidence and there is no prescribed manner in Rule 6 (2) for maintaining separate records.It is also found that the only requirement is that the credit should not be taken on inputs used in exempted goods. If the inventory of exempted goods are separately maintained and no credit is availed on the inputs used therein, this will serve the purpose. The demand of 10% amount under sub-rule 3 of Rule 6 of the CCR, 2004 on the export clearances as detailed in An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempted goods and informed that in absence of maintenance of such separate accounts, they would be either required to pay an amount equal to 10% /5% of the value of exempted goods or an amount equivalent to the Cenvat Credit attributable to the inputs/input services used in or in relation to manufacture of exempted goods in terms of Rule 6(3) of the Credit Rules. In response, the Respondent vide their letter dated 20.2.2009 submitted that Rule 6(2) of the Credit Rules are applicable to the present case. The Respondent stated that they are in a position to maintain separate accounts for production of both dutiable as well as exempted goods as stipulated in the above provisions, so, they shall be entitled to credit of duty of inputs used excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith interest and penalty alleging that the Respondent did not maintain separate accounts for inputs used in manufacture of dutiable as well as exempted goods in contravention of the provisions of Rule 6(3), Rule 6(3)(b) of the Credit Rules. Though the department resumed the record on 17.12.2009 relating to inputs and finished goods, however, the same was not relied upon in the show cause notice. In the draft show cause notice, it was proposed to rely, but finally, the same does not find mentioned in the impugned show cause notice. The documents were finally obtained under RTI alongwith the records relating to the proceedings to issue SCN. The record very specifically mentioned the fact that the exempted goods were manufactured out of inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate records were maintained for duty paid inputs and duty-free inputs utilised in the manufacture of dutiable and exempted goods in accordance with Rule 6 of the Credit Rules. In this regard, details of finished dutiable goods and exempted goods along with their raw materials is tabulated below: Dutiable Goods Finished Goods Raw Materials Peppermint Oil/ Dementholised Peppermint Oil Mentha Oil Menthone DMO Other essential oils Other Essential Oil Mentha Oil Terpenes Exempted Goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of C. Ex., Lucknow, 2012 (293) ELT 232 (Tri.-Del.) 7. Learned counsel further submits that the present demand has been raised for the period from March 2008 to February 2010 and the SCN was issued on 26.3.2013 based on the statement recorded and record resumed on 17.12.2009, therefore the entire period is beyond the time limit of one year and is barred by limitation. The Respondent was under the bona fide belief that they had correctly availed the Cenvat Credit on only those inputs which are used in the manufacture of dutiable goods. This belief was strengthened on account of the separate records maintained. Further, ER 1 returns were filed regularly by the Respondent. Once it is established that the Respondent was fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t not as required under Rule 6 (2) of the CCR, 2004. We find that this view is not supported by any evidence and there is no prescribed manner in Rule 6 (2) for maintaining separate records. We also find that the only requirement is that the credit should not be taken on inputs used in exempted goods. If the inventory of exempted goods are separately maintained and no credit is availed on the inputs used therein, this will serve the purpose. The demand of 10% amount under sub-rule 3 of Rule 6 of the CCR, 2004 on the export clearances as detailed in Annexure-A to the notice is contrary to the provisions of sub-rule 6 of Rule 6 of the Cenvat Credit Rules, 2004 as the export clearances are one of the clearances among others to which the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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