Case Law Details
Brief Facts
The appellant is manufacturer of pharmaceuticals products. The period of dispute is from May, 2007 to March 2008. During this period, the appellant were using various common input services in or in relation to the manufacture of dutiable final product as well as exempted final products.
However, they were not taking the cenvat credit in respect of these input services in proportion to the turnover of the exempted final product. During the period of dispute, they were foregoing the cenvat credit in respect of the common input services to the extent of 70%, based on the ratio of the turnover of dutiable and exempted final product during the previous financial year.
The Department was of the view that since separate account and inventory of the input services meant for dutiable final product and exempted final product had not been maintained as per the provisions of Rule 6(2) of Cenvat Credit Rules, 2004, the provisions of Rule 6(3)(b) would become applicable. It is on this basis that after issue of Show Cause Notice, the Commissioner in his order held that in respect of clearances of the exempted final products, the appellant in accordance with the provisions of Rule 6(3)(b) of Cenvat Credit Rule, 2004 would be liable to pay an amount equal to 10% of the sale price of the goods.
Contention of the Assessee
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Logical….
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