IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, KOLKATA EASTERN ZONAL BENCH : KOLKATA REGIONAL BENCH - COURT NO.2 [Virtual Mode of Hearing]

(Arising out of Order-in-Original No.17/COMMR/BOL/2017 dated 08.02.2017 passed by Commissioner of Central Excise & Service Tax, Bolpur.)

M/s. Arti Bakery Pvt.Ltd.

(DVC Sub-Station Road, Ningha, P.O.-Kalipahari, Asansol-713339.)

…Appellant VERSUS Commissioner, CGST & CX, Bolpur Commissionerate …..Respondent (Nanoor Chandidas Road, Sian, Bolpur, Dist: Birbhum, West Bengal, Pin-731204.)

APPEARANCE Ms. Rinki Arora & Mr. Mayur Jain, Advocates for the Appellant (s)

Shri S. Dey, Authorized Representative for the Revenue CORAM: HON’BLE SHRI R. MURALIDHAR, MEMBER(JUDICIAL)

HON’BLE SHRI RAJEEV TANDON, MEMBER(TECHNICAL)

FINAL ORDER NO. 76618/2025 DATE OF HEARING : 12.06.2025 DATE OF DECISION : 12.06.2025 Per : RAJEEV TANDON :

Aggrieved by the Order-in-Original No.17/COMMR/BOL/2017 dated 08.02.2017 confirming demand of duty of Rs.8,60,60,485/- along with interest apart from imposition of penalty of equal amount under the provisions of Rule 14 of the Cenvat Credit Rules, 2004, the appellant has filed the impugned appeal.

2. The appellant is a manufacturer of biscuits falling under Tariff Item No.1505 31 00 and/or 1905 90 20 for and on behalf of M/s. Parle Biscuits Ltd. and M/s. Parle Products Pvt. Ltd. (hereinafter referred to as principal manufacturers). The manufactured goods were cleared by the appellant on payment of duty on the sale price and/or MRP as decided and communicated by the principal manufacturers. The appellant manufactures both dutiable and exempted biscuits – details of which are as under :-

Dutiable Biscuit Exempted Biscuit Top (90 gm) Top (25 gm)

Krack Jack (80 grams/40 Krack Jack (50.4 gram/100.80 gram & 200 gram) gram & 250 gram)

Top Spin (90 gram)

3. The issue involved in the present appeal rests on a very narrow compass i.e. whether presumptive tax @ 6% of exempt biscuits in terms of Rule 6(3) of Cenvat Credit Rules, 2004 is payable on the grounds of non-maintenance of separate accounts as envisaged in terms of Rule 6(2) and non-exercise of option under Rule 6(3A)(a) of Cenvat Credit Rules, 2004, despite the appellant not taking proportional credit attributable towards exempt goods manufactured by them. Related questions pertaining to invocation of extended period as well as imposition of penalty on the appellant also arise for consideration in terms of show cause notice issued to the appellants.

4. A show cause notice for the period 01.04.2012 to 31.03.2015 has been issued to the appellant in the matter. The appellant has submitted that till December 2012, they were manufacturing only exempted goods and hence had not availed any Cenvat Credit on the inputs. They further submit that w.e.f. January 2013 they started producing both dutiable and finished goods and cleared in packaged form, with particular Kg. retail sale price (RSP) as were exempt in terms of Notification No.12/2012-CE(NT) dated 17.03.2012 at Sl.No.27.

5. After due process, the show cause notice issued as aforestated was confirmed vide impugned Order-in-Original and an amount of Rs.16,86,679/- as stood paid by the noticee was adjusted against the aforesaid total demand referred in para 1 above.

6. We have heard both sides and perused the case records.

7. The point for consideration therefore is whether Rule 6 of the Cenvat Credit Rules gets attracted in the matter in view of the specific facts of the present case and if so to what consequences. The appellant has emphasized that they availed the Cenvat Credit on the inputs attributable to and used exclusively in the manufacture of dutiable goods, upon receipt of such inputs under cover of the appropriate duty paying documents. They emphasized that credit in respect of inputs used exclusively for manufacture of exempt goods has not at all been availed by them. In so far as common cenvatable inputs are concerned, the appellant submits that though they are accounted in RG-2