Page 128 - ELT_15th August 2020_Vol 373_Part 4

462 EXCISE LAW TIMES [ Vol. 373

Provided also that in case of transportation of goods or passengers by
rail the amount required to be paid under clause (i) shall be an amount
equal to 2 per cent of value of the exempted services.
Explanation I. - If the manufacturer of goods or the provider of output
service, avails any of the option under this sub-rule, he shall exercise such
option for all exempted goods manufactured by him or, as the case may be,
all exempted services provided by him, and such option shall not be with-
drawn during the remaining part of the financial year.
Explanation II. - For removal of doubt, it is hereby clarified that the
credit shall not be allowed on inputs used exclusively in or in relation to the
manufacture of exemplted goods or for provision of exempted services and
on input services used exclusively in or in relation to the manufacture of
exempted goods and their clearance upto the place of removal or for provi-
sion of exempted services.
Explanation III. - No CENVAT credit shall be taken on the duty or tax
paid on any goods and services that are not inputs or input services.”
7. Rule 6(1) states that no Cenvat credit shall be allowed on the inputs
used in relation to manufacture of exempted goods. Sub-rule (2) provides excep-
tion to sub-rule (1), it deals where the manufacturer or a provider of output ser-
vice is involved in both dutiable as well as exempted goods or services. For avail-
ing the CENVAT credit, separate accounts are to be maintained as envisaged in
clauses (a) and (b) to the sub-rule. Sub-rule (3) starts with a non obstantate clause
and contemplates the situation where separate accounts are not maintained and
provides for options. As per clause (i), 6% duty is to be paid of the value of ex-
empted goods and services; or as per clause (ii), to pay an amount as determined
under sub-rule (3A); or sub-clause (iii) provides that a separate account is to be
maintained for receipt, consumption and inventory of input as per clause (a) to
sub-rule (2) and Cenvat credit can only be taken on input under sub-clauses (ii)
and (iv) of clause (a) and also pay to the amount determined under sub-rule (3A)
on the input service.
8. There is no dispute raised on the fact that till 20-8-2012, the nature of
pipes manufactured was not determined as exempt because GMADA was not
granted exemption certificate. The respondents were not maintaining separate
books of account. The goods cleared were on payment/adjustment of duty under
Rule 6(3) and also dutiable goods albeit in small ratio. The finding recorded by
the Tribunal that dutiable goods were cleared on 5-11-2012 has not been chal-
lenged.
9. The contentions raised by Learned Counsel for the appellant are not
well founded. Rule 6(2) provides no minimum ratio for the manufacture of ex-
empted and dutiable goods. It deals with manufacturing of exempted and duty
chargeable goods and in case of non-maintaining of separate accounts, then Rule
6(3) comes into operation and as per first option the manufacturer is liable to pay
6% of the value of exempted goods.
10. The submission that from September to 4-11-2012, WCL was only
manufacturing exempted goods is merely on presumptions and the argument
falls flat in view of the finding recorded by the Tribunal that on 5-11-2012 the
goods were cleared on payment of duty. Without there being any manufacturing
of dutiable goods prior to 4-11-2012, the goods could not have been cleared on
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