Help required- Rule 6(3)(b)
Querist :
Anonymous
(Querist) 25 December 2009
This query is : Resolved
Hello People,
I am facing a problem with a litigation in excise. It will be very generous of you if you can provide me some help.
The case is:
We manufacture both dutiable and exempted goods. We have received a notice from commissioner regarding payment of duty amounting to 8% of total price of exempted goods cleared from the factory. The commissioner has relied on rule 6(3)(b) of CENVAT Credit rules 2004.
We had oversightly availed credit on service tax of Rs 1,46,921, we maintained separate accounts for dutiable and exempted goods but it was very difficult for us to maintain different accounts for the services. Hence the commissioner has asked us to pay 8% of total sale of exempted goods which amounts to Rs. 2,67,94,099. It is worth noticing that we reversed the credit before any show cause notice from the department. The credit reversed consisted of credit 1. taken for excisable product and 2. exempted products, which in totality means that we reversed the full credit+penalty(which was calculated by us by their methods).
There are many cases in which there were judgement that ‘ if full credit is reversed it is equal to no credit taken’. Commissioner gave a decision against us and we are now in cestat against the decision given by commissioner.
Kindly, guide me if I am justified with my explanation?
Regards
alokraman
(Expert) 26 December 2009
supreme court in maruti case(2009 ) recently covered your matter .please peruse the matter and do accordingly
Querist :
Anonymous
(Querist) 26 December 2009
Hello Alok ji,
Thank you for the reply. I went through the maruti case, but they are under section 4 , whereas we are covered under rule 6(3)(B).
Kindly to the helpful.
Tapan Sharma
