S.S. Kang
1. Heard both sides.
2. Revenue filed this appeal against the impugned order passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) set aside the demand for the period from 1.3.2002 onwards on the ground that there was no recovery procedure prescribed either under the Central Excise Act or under the Cenvat Credit Rules, 2002.
3. The respondents are engaged in the manufacture of various types of paper falling under Chapter No. 48 of the Central Excise Tariff and cleared on payment of duty as well as exempted goods and availing credit in respect of the common inputs. Respondents were not maintaining separate records in respect of the inputs used in the manufacture of exempted goods and dutiable goods. Therefore, as per the provisions, the respondents were liable to pay 8% of the price of the exempted goods. Show Cause Notice was issued and the adjudicating authority confirmed demand of Rs 1,13,53,995/- alongwith interest and imposed a penalty by taking into consideration 8% of the price of the exempted goods. Respondents filed appeal and the Commissioner (Appeals) set aside the demand prior to 1.3.2002 on the ground that during that period there was no provision to recover 8% of the price under Rule 6 (3) of the Cenvat Credit Rules, 2002.
4. We find that the provision of Rule 6 of the Cenvat Credit Rules, 2002 is retrospectively amended by Section 69 of the Finance Act, 2010 and a recovery procedure has been prescribed. In these circumstances, the matter requires reconsideration by the Commissioner (Appeals) regarding liability of the respondents in respect of the exempted goods as the respondents are availing credit on common inputs without maintaining separate records.
5. The appeal is disposed of by way of remand.