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2012 (4) TMI 501 - AT - Central ExciseWaiver of pre-deposit of duty - Denial of CENVAT Credit - denial the credit in present proceedings on the ground that the circular, dated 1-2-2007 is prospective nature and in view of the provisions of Rule 4 of the Cenvat Credit Rules which provides that the Cenvat Credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer of output service - Held that:- proviso to notification No. 30/2004-C.E., dated 9-7-2004 states that ‘nothing contained in this notification shall apply to the goods in respect of which the credit of duty on inputs has been taken under the provisions of the CENVAT Credit Rules, 2004’. Therefore, it is clarified that non-availment of credit on inputs is a precondition for availing exemption under this notification and if manufacturers avail input tax credit, they would be ineligible for exemption under this notification. Textile manufacturer/processors have to use common inputs, which are used in a continuous manner, and it may not be practically possible to segregate and store inputs like dyes and chemicals separately or maintain separate accounts. In such cases, in order to facilitate simultaneous availment of the two notifications, such manufacturers may be advised not to take credit initially and instead take only proportionate input credit on inputs used in the manufacture of finished goods cleared by him on payment of duty. Such proportionate credit should be taken at the end of the month only. At the time of audit of records, or at any other time if the department requires, the assessee should support of such credit availment with the relevant records maintained by them showing input quantity used for the goods manufactured and cleared on payment of duty. In case any subsequent verification reveals that such proportionate credit taken is incorrect, the penal provisions as prescribed under the law will be taken against such assessees - prima facie the applicants has made out a strong case, therefore the pre-deposit of dues are waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.
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