EMCURE PHARMACEUTICALS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of P&P medicaments. They manufacture both dutiable and exempted products. On the ground that the appellants had not maintained separate account in respect of inputs services used in the manufacture of exempted as well as dutiable final products, 10% of the value of the exempted goods has been demanded under Rule 6(3) of Cenvat Credit Rules, 2004. The demand is for the period from January 2005 to March 2008 and a penalty equivalent to amount demanded has also been imposed under Section 11AC of Central Excise Act, 1944 and interest as applicable has also been demanded.

(2.) HEARD both sides.

(3.) THE Ld. DR on the other hand submits that the intention of the legislature all along was that separate accounts are required to be maintained. He does not agree with the interpretation of Rule 6(2) of Cenvat Credit Rules, 2004 made by the Ld. Advocate. He submits that law requires maintenance of separate accounts and failure to do so, would result in payment of 10% of the value of the exempted goods. He also relies upon the decision of the Hon'ble Bombay High Court in the case of Nicholas Piramal India Ltd. (supra), in support of his contention that subsequent reversal with interest is not sufficient and cannot be a substitute for maintenance of separate accounts.