TMI Blog2011 (4) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in favor of assessee. - E/2303/2006 - - - Dated:- 7-4-2011 - Shri B.S.V. Murthy, Shri Ashok Jindal, JJ. Shri Prakash Shah, Advocate with Shri J.H. Motwani, Advocate for the appellant Shri S.M. Vaidya, Authorised Representative (JDR) for the respondent Per: B.S.V. Murthy: The appellant was a DTA unit and got converted into a 100% EOU w.e.f. 14/07/2004. The appellant did not reverse the CENVAT credit available in the books of accounts at the time of conversion from DTA unit to 100% EOU. In the impugned order, it has been held that the appellant was required to reverse the CENVAT credit when conversion from DTA unit to 100% EOU took place and accordingly the amount of credit available at the time of conversion has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions made by both sides. The issue before us is similar to the facts in the decision of the Tribunal in the case of Sun Pharmaceuticals Industries Ltd. (supra). The Tribunal after considering the issue in detail, came to the conclusion that the department cannot insist upon reversal of the CENVAT credit available in the books of accounts or recovery of the same if the same has been utilised. Since we are in full agreement with the reasoning adopted by the Tribunal in Sun Pharmaceuticals Industries Ltd. (supra), it would be appropriate to reproduce the relevant paragraphs of the said decision: "6. We have carefully considered the case records and the submissions by both sides. We find that Sun had not violated the provisions of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, and in force on the date the erstwhile rules were rescinded shall, to the extent they are relevant and consistent with the new set of rules shall be deemed to be valid. CBEC Circular No. 77/99-Cus., dated 18-11-99 is reproduced below :- "Paragraph 9.28 of the EXIM Policy, 1997-2002 provides that existing DTA units may also apply for conversion into an, EOU/EHTP/STP but no concession in duties and taxes would be available under the scheme for plant, machinery and equipment already installed. In this connection, instances have come to the notice of the Board that such units on their conversion into EOUs have been asked to reverse the Modvat Credit already availed of, on plant and machinery procured by them prior to their conversion int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have gone through the rival contentions. The appellants have informed their intention of taking Cenvat credit. The Department acknowledged the intimation sent by the appellants. In these circumstances, the appellants started taking credit. Therefore, there is no contumacious conduct on the part of the appellants warranting imposition of any penalty. Therefore the penalties imposed on the appellants and on Shri P. Ravi, General Manager are set aside. As regards the merits of the case, we find that there is no rule corresponding to the erstwhile Rule 100H of the Central Excise Rules, 1944. The interpretation that there is no prohibition for 100% E.O.U. to take Cenvat credit appears to be correct. However, in view of Rule 17 of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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