KUSTERS CALICO MACHINERY LTD. Vs. CCE

JUDGEMENT

(1.) THE appellant is manufacturing textile machinery and is availing Cenvat credit of inputs as well as input services received by them. The appellant maintains necessary records for the same purpose. The following textile machineries are the disputed goods in question :

(2.) IN respect of the above mentioned machineries and/or parts, it is the case of the department that although the same were exempt from payment of duty in terms of Notification No. -CE dated 01.3.02, as amended, (Sr. No. 193 read with list -6) till 28.2.06 and thereafter vide Notification No. -CE dated 01.3.06 (Sr. No. 3 read with list -2), the appellant chose to pay central excise duty on such goods at full applicable rate, despite the fact that the same were wholly exempt from duty payment.

(3.) THAT for the above reasons, the show cause notice dated 05.8.08 come to be issued to the appellant, seeking to treat the duty payment made by the appellant on the so called exempted excisable goods as unnecessary and unwarranted and merely a deposit made on own volition. However, in as much as the appellant had availed cenvat credit of duties paid on inputs used in or in relation to the manufacture of such machinery over and above other dutiable machineries manufactured, and in as much as the appellant did not maintain separate accounts for inputs used in dutiable as well as so called exempted production, the subject show cause notice sought to recover an amount equal to 10% of the value of such so called exempted machinery in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2004. The impugned order came to be passed against the appellant, confirming demand under Rule 6 of the Cenvat Credit Rules, 2004 and imposing penalties on the appellant.