Page 126 - ELT_15th August 2020_Vol 373_Part 4

460 EXCISE LAW TIMES [ Vol. 373

3. The facts are that M/s. Welspun Project Ltd. (for short, ‘WPL’) is en-
gaged 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-C.E., dated 17-
3-2012 and if the GMADA failed to get exemption certificate under the said noti-
fication, in that case duty was to be paid on the pipes. M/s. Welspun Corpora-
tion Ltd. (for short, ‘WCL’) acquired a unit in July, 2012 and started manufactur-
ing 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 ex-
emption 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 manu-
factured and supplied. The department on the basis of information that the re-
spondents were claiming Cenvat credit on the raw material used for manufac-
ture of exempted goods, issued show cause notices. Replies were filed denying
the allegation and stating that the goods manufactured were cleared on payment
of duty and also after availing exemption under notification dated 17-3-2012 by
reversing the amount @ 6% as stipulated in Rule 6(3)(1) of the CENVAT Credit
Rules, 2004 (for short, ‘the Rules’). The premises were visited by the preventive
staff. Order dated 30-9-2014 was passed by the Commissioner of Central Excise
holding that Cenvat credit on inputs was wrongly availed and that the purchase
order dated 5-11-2012 was only to facilitate availing of Cenvat credit. Thereafter,
appeals were preferred before the Tribunal which allowed the appeals vide order
dated 10-8-2016, hence the present appeals.
4. Though substantial questions of law (A) to (F) have been proposed,
however, question (D) would be relevant to decide the issue involved in the pre-
sent appeals.
5. Learned Counsel for the appellant argued that WCL acquired the
unit only in July, 2012 and that order for supply of pipes which were to be sup-
plied to GMADA by WPL was placed in July, 2012 and till 4-11-2012, WCL was
only manufacturing exempted goods hence could not claim benefit of Rule 6(3)
of the Rules. A feeble attempt was made to argue that the conduct in availing
Cenvat credit was mala fide and the order placed in November, 2012 for supply of
pipes leviable to duty was merely with the intention to get benefit of Rule 6.
However, the said allegation of mala fide or fraud could not be substantiated by
the material on record.
6. For reference, Rule 6(1) to (3) of the Rules is reproduced as under :
“(1) The CENVAT credit shall not be allowed on such quantity of input
used in or in relation to the manufacture of exempted goods or for provi-
sion of exempted services, or input service used in or in relation to the
manufacture of exempted goods and their clearance upto the place of re-
moval or for provision of exempted services, except in the circumstances
mentioned in sub-rule (2) :
Provided that the CENVAT credit on inputs shall not be denied to the job
worker referred to in rule 12AA of the Central Excise Rules, 2002, on the

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