KALEESUWARI REFINERY PVT. LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of refined edible vegetable oils and allied products. The edible oils manufactured by them were exempt from payment of duty of excise till 28.2.2003 and became dutiable w.e.f. 1.3.2003. During April 2002 to Feb'2003, when the said products were not dutiable, the appellants had received capital goods in their factory and had taken Cenvat credit of the duty paid thereon amounting to Rs. 29,90,702/ -. It appeared to the department that since the capital goods had been received and installed prior to 28.2.2003, the above credit was not admissible to the appellants in terms of Rule 6(4) of the Cenvat Credit Rules, 2002 (CCR, 2002, for short). Further, from the results of enquiries made into the process of manufacture of refined edible oils as also from the scrutiny of records maintained by the appellants, it appeared to the department that the appellants were liable to pay, but had not paid, under Rule 6(3)(b) of CCR 2002, 8% of the price of the refined edible oils (unbranded) which had been cleared at 'Nil' rate of duty during March to December 2003. This finding was based on the fact that Cenvat credit had been availed on packing materials and chemicals which had been used as common inputs during the said period in relation to the manufacture of both dutiable final products (branded refined edible oils) and exempted final products (unbranded refined edible oils). 8% of the price of the exempted final products was estimated at Rs. 3,78,10,848/ -. The department also noticed certain other "wrong" Cenvat credit availments by the appellants. Accordingly, show -cause notice dated 7.4.2004 was issued to the appellants demanding the aforesaid and other amounts (with interest thereon) and proposing penalties. The notice contested the demands. In adjudication of the dispute, learned Commissioner passed the following order:

(2.) IN the present appeal, the appellants are contesting only the demand of duty of Rs. 29,40,702/ -, demand of the amount of Rs. 3,78,10,848/ - and the penalties.

(3.) HEARD both sides and considered their submissions.