Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2018 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 8 - AT - Central ExciseCarry forward of accumulated credit on Debonding of units - Transition of CENVAT Credit - transfer of accumulated credit - applicability of rule 10 of CENVAT Credit Rules, 2004/rule 11 of CENVAT Credit Rules, 2004 - Held that:- The scheme of indirect taxation requires that the tax burden is borne by the ultimate consumer, i.e. non-assessee, and all assessees in the production chain merely collect the duty for remitting to the government. At the same time, excise duties are limited to the contribution made to the manufacture of any goods; this requires that, for the proper administration thereof, each stage in the manufacturing process should be entitled to disassociate itself from the duties discharged upto the immediately preceding for computation of excise liability. Thus the full burden of duty should, without the privilege of passing on, be borne by the first non-assessee in the chain of transactions. The input credit scheme is devised towards that end and embodied as the CENVAT Credit Rules, 2004. Denial of CENVAT credit accumulated from duties discharged on procurements employed in exported goods would, therefore, load the burden on the exporter which defeats the very premise that is contained in the CENVAT Credit Rules, 2004. The provisions of rule 10 or rule 11 will not apply to debonding units. It is also patently clear that a similar provision has not been explicitly incorporated in the CENVAT Credit Rules, 2004 for such debonding units - Denial of such utilization would have the impact of taxing the exporter as ultimate consumer and burdening the appellant with an implied duty on exports that is not authorized by law. To do so is to act illegally. Denial of carry forward of accumulated CENVAT credit to assessees debonding from the ‘100% Exported Oriented Unit’ scheme to continue operations without the privileges is not correct in law - appeal allowed - decided in favor of appellant.
|