Decided on January 09,2015



Archana Wadhwa, Member (J) - (1.)THE appellant is engaged in the manufacture of P & P Medicaments and was clearing their final products on payment of duty. However, one consignment was cleared by them by claiming the exemption Notification No. dated 2.9.2008, which exempts clearances made for flood victims subject to fulfillment of certain conditions. There is no dispute that the said conditions stand fulfilled by the appellant and the benefit of Notification was available to them.
(2.)HOWEVER , subsequently the Revenue raised the show -cause notice alleging that the appellants have not maintained separate input credit records in respect of various inputs used in the manufacture of dutiable final product as also in respect of the one clearance made in terms of the Notification in question. The appellant at that point of time submitted that they would not claim the exemption benefit in respect of the said clearance and accordingly, paid the duty of Rs. 2,33,277/ -. The Revenue vide their impugned orders held that inasmuch as at the time of clearance, the appellant had availed the exemption, they were required to pay the duty in terms of the provisions of Rule 6(3) of CENVAT Credit Rules. Accordingly, they confirmed the amount of Rs. 3,61,670/ - along with imposition of penalty under Rule 15 of CENVAT Credit Rules.
After appreciating the facts, I find that the appellant was not availing the exemption regularly. The exemption in question, which is solely meant for flood victims, was availed in respect of one clearance only. In such a scenario, no assessee would keep separate cenvatable accounts in terms of Rule 6. On being pointed out by the Revenue, the appellant forgone their claim to the exemption notification and paid duty accordingly. Merely because the appellant did not pay the duty at the time of clearance, in my views, should not be adopted as a reason for confirmation of demand in terms of Rule 6(3) of CCR. The only consequence of non -payment of duty at the time of clearance of the goods would be confirmation of interest from that date till the date of payment of duty. Learned counsel agrees to pay such interest.

(3.)IN such a scenario, I set aside the impugned order confirming the demand in terms of Rule 6 and imposing penalty on the appellant. However, the appellant would be liable to pay the interest in respect of the duty paid subsequently on the clearances effected under the exemption Notification. The stay as also the appeal gets disposed of in above manner.
(Order pronounced and dictated in open court)


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