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TMI Blog2025 (5) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... ,310/-, in terms of Rule 6(3) and Rule 6(3)(ii) of Cenvat Credit Rules, 2004 (CCR) and also imposed penalty under section 11AC read with Rule 15(2) of CCR. 2. The issue, in brief, is that the appellants were manufacturing several excisable goods including sugar and molasses. Additionally, the appellant was also manufacturing fuel for rocket launching vehicles of Indian Space Research Organization (ISRO) described as Ultra Hydrazine (UH), Mono Methyle Hydrazine (MMH) & Hydroxy Terminated Poly Butadiene (HTPB) and cleared under Notification No.64/95-CE dt.16.03.1995 and Notification No.10/97-CE dt.01.03.1997 without payment of duty. Whereas, other excisable goods cleared from the factory were dutiable. They have also availed benefit of Cenva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for generation of electricity and the electricity so produced would have been used for both dutiable and exempted goods, which is nothing but captive consumption and that there must be sale of exempted goods to attract the provisions of Rule 6 of CCR. Morevoer, fuel as such is excluded from the provision of Rule 6. They also argued that even if the departmental stand is correct, the quantum of duty demanded is not realistic and it is enough if the Cenvat credit taken is reversed. The Adjudicating Authority did not accept their explanation that they had maintained separate accounts for dutiable and exempted final products as no evidence was adduced and also doubted the claim that input services were not used in the manufacture of exempted pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the fact that the appellants were admittedly clearing certain exempted goods along with certain dutiable goods from their factory or otherwise. On going through the SCN dt.05.03.2010, we find that the appellants are primarily engaged in manufacture of sugar but are also manufacturing certain specialized products which are cleared to ISRO in terms of Notification No.64/95-CE, being an exemption notification. The department's view is that since they have taken certain credit in respect of certain input services including services used by appellant for transportation of gas by pipeline used for generation of electricity and not maintained separate account, Rule 6(3) is invokable. The appellant's main contention is that they have separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficult to calculate and attribute the amount of electricity that might have been used in the plant within the factory for production of exempted goods. We find that Rule 6, as it existed prior to 01.03.2016 provided for not allowing any Cenvat credit on such quantity of inputs used in or in relation to manufacture of exempted goods or for provision of exempted services or input services used in or in relation to manufacture of exempted goods or for provision of exempted services except in the circumstances mentioned in sub-rule (2). 10. As per the provision of Rule 6(2), the appellants who are admittedly manufacturing both dutiable and exempted excisable goods were required to maintain separate record for receipt and use of input services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for period prior to 01.04.2008, as such, then the only option left was to pay an amount at the specified rate indicated in the respective SCNs. However, for the period post 01.04.2008, the option is to be chosen by the manufacturer and it cannot be imposed on him by Department. Further, even if the procedure under Rule 6(3A) has not been followed in full, they can work out the credit attributable to said exempted goods, if any. 11. The appellant's reliance on the judgment of Hon'ble High Court in the case of Principal Commissioner, CGST, Ludhiana Vs Suraj Solvents & Vanaspati Industries [2023 (384) ELT 526 (P&H)], is distinguished as in that case the assessee could not apply because of pendency of proceedings in other forum, which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit attributable to the exempted goods. In case no credit is found attributable to the exempted goods, then no amount shall be liable to be payable. As far as the issue of limitation is concerned, we find that the Adjudicating Authority has considered their submission and has held that in the facts of the case, it is rightly invokable. We find that in this issue of reversal of credit, options under Rule 6, etc., were subject matter of differing interpretations during material time and even retrospective amendment was made to allow certain relief for period prior to 2008. Thus, the issue is interpretative in nature and there is no other strong and cogent ground for invoking extended period, hence, extended period cannot be invoked. 13. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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