Page 193 - ELT_15th August 2020_Vol 373_Part 4

2020 ] COMMISSIONER OF CGST, CUSTOMS & EXCISE, JABALPUR v. MAIHAR CEMENT 527

4. The facts are noted from C.E.A. No. 76/2018. It is stated that the re-
spondent Company is having registration for Central Excise and is engaged in
the manufacture of Cement Clinker and Cement falling under chapter Heading
No. 2523 of the first schedule to Central Excise Tariff Act, 1985. They also avail
the facility of Cenvat Credit on inputs, capital goods and services under Rule 3 of
the Cenvat Credit Rules, 2004.
5. The respondent availed Cenvat Credit of duty paid on the explosive
used in the excavation of limestone in the limestone mines. A part of the lime-
stone so quarried was utilized by the assessee in the manufacture of the Cement
and Cement Clinker that were chargeable to duty. Rest of the limestone excavat-
ed was transferred to its sister unit, from the mines itself without payment of
duty as the same are chargeable to Nil rate of duty. Thus, the inputs (explosives)
were used by the assessee in the manufacture of dutiable products (Cement and
Clinker) as well as exempted goods i.e. limestone transferred to the sister unit.
Therefore, the assessee had used inputs in the manufacture of both dutiable as
well as the exempted goods. The assessee was supposed to maintain separate
accounts/records for inputs (explosives) used in the excavation of limestone
used in the manufacture of dutiable goods (Cement and Cement Clinkers) and
for the exempted goods (limestone transferred to sister unit without payment of
duty). The revenue claimed that the assessee did not maintain separate records
for the same, so, they were required to pay an amount as described in Rule 6(3)(i)
[erstwhile Rule 6(3)(b)] of the Cenvat Credit Rules, 2004. But the assessee failed
to pay the said amount which appeared to be recoverable under Rule 14 of the
Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944.
6. Show cause notices were issued to the assessee under Rule 14 of
Cenvat Credit Rules, 2004 read with Section 11A of Central Excise Act, 1944
along with interest under Rule 14 of Cenvat Credit Rules, 2004. The show cause
notices were adjudicated by the Commissioner, Customs, Central Excise &
Service Tax, Jabalpur, vide order dated 21-12-2016 wherein the Commissioner
dropped the demands. The order of the Commissioner was reviewed by the
Committee of Chief Commissioners relating to the demand for the period from
1-3-2008 onwards. Accordingly, the department had filed 9 different appeals for
9 different show cause notices before the Tribunal.
7. The main contention of the Counsel for the appellant is that the ad-
judicating authority as well as the Tribunal failed to appreciate the significant
change brought in Rule 6(3)(i) of Cenvat Credit Rules, 2004 w.e.f. 1-3-2008 vide
Notification No. 10/2008-C.E. (N.T.), dated 1-3-2008.
8. The Learned Counsel for the respondent supported the order of the
authority and the Tribunal.
9. To appreciate the rival submissions of the parties it is apposite to re-
fer the relevant Rule 6 which reads as under :-
“Rule 6. Obligation of manufacturer of dutiable and exempted goods
and provider of taxable and exempted services. -
Rule 6(1) ibid provides that Cenvat credit shall not be allowed on such
quantity of input or input service which is used in the manufacture of ex-
empted goods.
Rule 6(2) ibid further stipulates that where a manufacturer or provider of
output service avails of CENVAT credit in respect of any inputs or input
services, and manufactures such final products or provides such output
EXCISE LAW TIMES  15th August 2020  193