1. These appeals have been filed against common order-in-original dated 22/12/2016 by which 10 show cause notices were adjudicated on the common issue whereby the learned Commissioner have been pleased to drop the proposed demand for reversal of Cenvat Credit, proposed under Rule 6(3)(b) of Cenvat Credit Rules.
2. The brief facts are as follows:
2.1. M/s. Maihar Cement- Unit-I (the Noticee) and M/s. Maihar Cement Unit-2 are two sister units both situated at Maihar on same plot having separate registration in Central Excise and are two divisions of the same proprietor viz. M/s. Century Textiles and Industries Ltd. Both the units are using limestone for the manufacture of Cement. All the mines are either owned by Century Textiles & Ind. Ltd. (lease is in the name of Maihar Cement prop. Century Textiles & Ind. Ltd.). The captive limestone mines are managed by Unit-I, which set up in 1973. Unit-2 was set up in 1995-96. There is no mine in the name of M/s. Maihar Cement Unit-2. Royalty on limestone is also paid to the State Government by Unit-I only, as M/s. Maihar Cement Unit-2 do not have any explosive license in their name.
2.2 M/s. Maihar Cement with the help of explosives (on which they are availing Cenvat Credit) excavate limestone, part of which they are utilizing in their own factory to manufacture clinker and cement which are chargeable to duty. Part of the limestone so excavated is transferred by them to their sister unit-M/s. Maihar Cement Unit-2 from the mines itself without payment of duty, being exempted. Thus the cenvatable inputs (explosives) are used by Maihar Cement Unit I in the manufacture of dutiable products (clinker and cement), as well as exempted goods i.e., limestone. M/s. Maihar Cement Unit I have not maintained separate accounts for inputs used in the manufacture of dutiable and exempted goods.
2.3 Respondent is cement manufacturing units being Maihar Cement-Unit 1 (hereinafter referred to as 'Unit 1') and Maihar Cement Unit 2 (hereinafter referred to as 'Unit 2'). Both the units were registered separately under the erstwhile Central Excise Rules, 1944 and they are located adjacent to each other. Both Unit 1 and Unit 2 are sister units and managed by common managerial personnel from common factory office.
2.4 Both the units are owned by of Century Textile & Industries, which was granted a mining lease upto year 2038 for mining of limestone which is the basic raw material for the manufacture of cement. Limestone excavated from the captive mines is used as a raw material for both the units.
2.5 Unit 1 has an 'explosives licence' and buys the explosives which are used for excavation of limestone from captive mines. Unit 1 takes the entire cenvat credit of the explosives. A part of the limestone excavated from the mines is used at Unit 1 for the manufacture of cement while part of the limestone excavated is cleared from mines to Unit 2 for the manufacture of cement. Undisputedly, Cement is taxable and both Unit 1 and Unit 2 are paying Central Excise Duty on the manufacture and clearance of cement.
2.6 In the above background, ten (10) different show cause notices were issued to the Respondent, wherein it was alleged that common inputs (explosives) were used by Unit 1 in the manufacture of dutiable goods (cement) and non dutiable goods (limestone) and no separate accounts (of explosive) were maintained for the same. Therefore, respondent i.e. Unit 1 has violated Rule 6(3)(b) and/or Rule 6(3)(i) of Cenvat Credit Rules, 2002/2004 and is liable to pay 10%/5%/6% of the sale value/value of limestone (exempted product) cleared to Unit 2. Penalty was also proposed to be imposed upon the respondent.
2.7 The Respon........