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2019 (3) TMI 1216 - CESTAT CHANDIGARHCENVAT Credit - transitional provisions - Revenue is of the view of that as the appellants have started manufacturing exempted goods, therefore, the Cenvat credit lying in their Cenvat credit account contained in inputs/ semi finished goods/ finished goods shall lapse in terms of Rule 11 - Rule 11(3) of the Cenvat Credit Rules, 2004 - Held that:- As the appellant’s final product has become exempt from payment of duty absolutely, therefore, the appellants are not allowed to utilize the Cenvat credit lying in their Cenvat credit account. But there is no provision that “how the same shall be recovered” - Rule 14 of the Cenvat Credit Rules, 2004, is applicable only in a case where the Cenvat credit has been taken and utilized wrongly. Admittedly, the Cenvat credit has not been utilized by the appellants i.e. lying in Cenvat credit account. Moreover, at the time of taking the Cenvat credit, the appellants were entitled to take the Cenvat credit, therefore, they have not taken and utilized the Cenvat credit wrongly. Therefore, the provisions of Rule 14 are not applicable to the facts of this case. Moreover, there is no charging provision has incorporated for recovery of Cenvat credit till yet. A similar issue has been dealt by this Tribunal in the case of M/s Shiv Engineering Industries [2018 (11) TMI 418 - CESTAT CHANDIGARH], wherein in terms of Rule 3(5) of the Cenvat Credit Rules, 2004, if the inputs were cleared as such, the assessee is required to reverse the Cenvat credit taken on such inputs in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. But in case, if the Cenvat credit has not been reversed then how the same is recoverable. Admittedly, in the case in hand, the Cenvat credit sought to be recovered in terms of Rule 14 of the Cenvat Credit Rules, 2004, the appellants were entitled to take the Cenvat credit at the time of availment of Cenvat credit, therefore, the same cannot be said that they have taken Cenvat credit wrongly. Further, the Cenvat credit is lying in their Cenvat credit account; therefore, the same has not been utilized by the appellants wrongly. In these terms, Rule 14 of the Cenvat Credit Rules, 2004 is not applicable to the facts of this case. Appeal allowed - decided in favor of appellant.
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