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2018 (7) TMI 850 - AT - Central ExciseTransitional provisions - CENVAT Credit - requirement of reversal of credit while opting exemption - Department took the view that even this cenvat credit balance amount should lapse in view of the provisions of Rule 11 (3) (ii) of Cenvat Credit Rules, 2004 Held that:- Sub-rule (3) (i) ibid will apply when the assessee opts for an exemption from the whole of duty of excise leviable under a notification issued under Section 5A of the Central Excise Act, 1944. Sub-rule (3) (ii) ibid will be attracted only to those assessees who are confronted with absolute exemption in respect of final product/s manufactured by them, in which case the entire balance of cenvat credit lying in his account shall lapse and the same shall not be allowed to be utilized for payment of duty for home consumption or for export - in sub rule 3 (i) ibid, the assessee has to ‘opt‛ for the exemption whereas in sub-rule 3 (ii) ibid, there is no such option available to the assessee and the absolute exemption that may have been brought forth under Section 5A ibid would apply unilaterally to the related final product manufactured by the assessee. It is important to note that the law makers have not incorporated the requirement of payment of cenvat credit equivalent to credit taken by the assessee in respect of inputs lying in stock or in process in sub rule 3 (ii) ibid. This is because once the entire cenvat credit account is reduced to naught, there will be no CENVAT credit that will be available whatsoever, under sub-rule 3 (ii) ibid, for the assessee to avail. The impugned order then cannot sustain and will require to be set aside - appeal allowed - decided in favor of appellant.
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