VOLTAMP TRANSFORMERS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal is directed against the Order -in -Appeal No.COMMR(A)/309/VDR -II/2009, dt. 31.12.09.

(2.) THE relevant facts that arise for consideration are that the appellant herein is a manufacturer of transformers and are availing CENVAT Credit on duty paid of inputs used in the manufacturing of finished products. During the relevant period from May 2007 to November 2007, the appellants cleared various transformers i.e. finished goods by availing benefit of exemption from payment of duty in terms of Notification No. -CE, dt. 14.06.06, as amended by Notification No. -CE, dt. 13.10.06. The said notification grants exemption to the excisable goods from the whole of duty subject to the condition that the buyer has to produce duty free certificate issued under "Served From India Scheme" (SFIS) as per Para 3.6.4 of Foreign Trade Policy 2006 -07. The appellants cleared the finished goods by debiting the duty amount from the certificate produced by the buyers. The lower authorities were of the view that the appellants have used Cenvatable input in the manufacture of goods cleared under exemption and having not maintained proper and separate accounts, for inputs used in exempted goods, invocable under Rule 6(2) of CENVAT Credit Rules, 2004, demanded amount equal to 10% of the value of the goods vide Show Cause Notice dt. 29.04.08, along with proposition for imposition of penalty and demand of interest. The appellants contested the Show Cause Notice on merit. The adjudicating authority did not agree with the contentions raised and confirmed the demand along with interest and equivalent amount of penalty. Aggrieved by such order, the appellants preferred an appeal before ld. Commissioner (Appeals), who did not agree with the contentions raised and rejected the appeal.

(3.) LD . SDR, on the other hand, would reiterate the findings of lower authorities and submitted that the debit in the certificate produced under SFIS scheme will not fall under the category of exemption mentioned in proviso to Rule 6(6) of CENVAT Credit Rules, 2004 and hence the appellants having not maintained separate accounts of inputs used, are required to pay amount equal to 10% of the value of the exempted goods, as per Rule 6(3)(b) of CENVAT Credit Rules, 2004.