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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 Excise Appeal No.75743 of 2017 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 :-

No credit taken on input service during period January 2013 to March 2013.

April 2013 - March Credit taken on common Inputs proportionate to quantity 2014 (FY 2013 - 14) of Inputs used in dutiable biscuits with credit on inputs used exclusively in dutiable final products. Separate account of inventory maintained in RG23A- Part-1 (Quantity A/c) and Stock Reports as per Rule 6(2) of CCR, 2004 The credit availed in excess to proportionate use Rs. 1,50,278/- has been reversed with interest of Rs. 44,950/- vide GAR-7 challan No. 00287 dated 30/4/2015 & informed Range vide our letter dt. 30/4/2015. Also, excess credit of Rs. 8,11,019/- noticed has been reversed vide PLA debit entry No. 6 dated 14/10/2016 and Interest of Rs. 3,85,587/- (@ 18% for 1262-days) paid vide PLA debit entry No. 7 dated 14/10/2016. On input services Cenvat credit taken only on the Excise Appeal No.75743 of 2017 strength of ISD invoices issued by the Principal Manufacturer M/s. Parle Biscuits, during February, 2014 and March, 2014 with proportionate credit reversal done April 2014 - March Option under rule 6(3A) submitted vide letter dated 2015 (FY 2014 -2015) 14/10/14. Credit taken on common inputs proportionate to quantity of inputs used in dutiable biscuits with credit on inputs exclusively used in dutiable final products. Separate account of inventory maintained in RG23A- Part-1 (Quantity A/c/). Excess credit noticed of Rs. 4,59,022/- has been reversed with interest of Rs. 1,04,796/- (@18% for 532 days) vide GAR-7 challan No. 00208 dated 9/10/2015. Also excess credit of Rs. 1,54,717/- has been reversed vide PLA Entry No. 8 dated 14/10/2016 and interest of Rs. 67,107/- paid (@18% for 897-days) vide PLA debit entry No. 8 dated 14/10/2016. A final credit adjustment as per rule 6(3A)(c) (iii) of CCR,2004 is submitted to Range vide letter dated 5/5/2015 copy enclosed with option letter dated 14/10/2014 as Annexure-6

 Further it is submitted that credit on input-service was not availed except on the basis of Input Service Distributor (ISD) Invoice issued by the Principal Manufacturer M/s. Parle Biscuits Bahadurgarh- Haryana during February. 2014 and March 2014 only. The ISD invoices distributed credit of tax paid on input service of Advertisement & Sales Promotion availed to advertise / promote sales of Biscuits Tap and Krackjack manufactured at the factory The credit distribution is in terms of rule 7 of CCR,2004 as per details below: