2018 (6) TMI 245 – CESTAT CHANDIGARH – TMI – CENVAT credit – demand of 6% of the value of exempted goods (waste cleared at nil rate of duty) – manufacture of dutiable as well as exempted goods – non-maintenance of separate records of inputs – Rule 6(3) of the Cenvat Credit Rules, 2004 – CBEC Circular No. 845/3/2007-CE dated 01.02.2007 – Held that:- The case of the Appellant is that they are availing proportionate cenvat credit at the end of the month. The said fact was bought in the knowledge of the adjudicating authority but the adjudicating authority has not given any heed to consider the same and in casual manner the adjudicating authority passed the order – the ld. Commissioner (A) has not given any finding to the claim made by the appellant that they are availing proportionate cenvat credit of inputs used in manufacture goods at the end of the month.
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It is required to be examined by the authorities below whether the appellant is availing proportionate cenvat credit of input
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clearing waste without payment of duty as waste is having nil rate of duty. During the course of audit, it was alleged that the appellant is not maintaining separate account for inputs used in manufacture of dutiable as well as exempted goods, therefore, on the value of the waste cleared by the appellant, the appellant is required to pay 6% of the value of the said waste. In these set of facts, the show cause notice was issued to the appellant to demand the amount as discussed above. The matter was adjudicated and the demand was confirmed along with interest and penalty was also imposed. Against the said order, the appellant is before me. 3. The ld. Counsel for the appellant submits that in reply to the show cause notice, the appellant has clarified that they are falling the guidelines given by the Circular No. 845/3/2007-CE dated 01.02.2007. As per the said circular, the appellant is availing cenvat credit only in respect of the inputs used in manufacture of goods cleared under Notifi
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hat textile manufacture/processors have to use common inputs, which are used in a continuous manner, and it may not be practically possible to segregate and store inputs like dyes and chemicals separately or maintain separate accounts. In such cases, in order to facilitate simultaneously availment of the two notifications, such manufactures may be advised not to take credit initially and instead take only proportionate input credit on input credit on inputs used in the manufacture of finished goods cleared by him on payment of duty. Such proportionate credit should be taken at the end of the month only. 7. The case of the Appellant is that they are availing proportionate cenvat credit at the end of the month. The said fact was bought in the knowledge of the adjudicating authority but the adjudicating authority has not given any heed to consider the same and in casual manner the adjudicating authority passed the order demanding value of 6% of the waste cleared at nil rate of duty. In th
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