HIMALAYA DRUG COMPANY Vs. COMMISSIONER OF CENTRAL

JUDGEMENT

(1.) THIS appeal has been filed against the Order -in -Original No. 02/2006 dated 15.05.2006, passed by the Commissioner of Central Excise, Bangalore.

(2.) THE appellants availed Cenvat Credit on certain inputs and the said inputs were used for the manufacture of both dutiable and exempted goods. Even though Cenvat Credit is taken on the common inputs used in the exempted and dutiable goods, the appellants reversed the proportionate Cenvat Credit on the inputs pertaining to the exempted goods. On the basis of the audit objection that the appellants had not maintained separate records for exempted and dutiable goods, Revenue proceeded against the appellants. The Adjudicating authority issued an Order -in -Original dated 8/2004 dated 27.07.2004 and confirmed the proposals made in the Show Cause Notice in terms of the impugned order. The appellants were required to pay 8% of the value of the exempted goods under Rule 57AH of the Central Excise Rules 1944, Rule 12 of the erstwhile Central Excise Rules 2001 -02 and Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944. The appellants approached the Tribunal and the Tribunal remanded the matter to the Commissioner for de novo consideration after examining all the relevant records by the Final Order No. 789/2005 dated 17.05.2005. In pursuance of the said Final Order, the Commissioner passed the De novo order which is impugned in the present case. In the impugned order, the Adjudicating authority has confirmed an amount of Rs. 75,64,053/ - being 8% of the value of the exempted goods cleared by the assessee for the period August 2000 to May 2002. Interest under Rule 57AH of the erstwhile Central Excise Rules, 1944, Rule 12 of the erstwhile Cenvat Credit Rules, 2001/2002 was demanded. A penalty of Rs. 14,28,663/ - under Rule 13 of the erstwhile Cenvat Credit Rules 2001/2002 has been imposed. The appellants are aggrieved over the impugned order. Hence they have come before the Tribunal for relief.

(3.) SHRI G. Shivadass, learned Advocate appeared for the appellants and Shri K. Sambi Reddy, learned JDR appeared for the Revenue.