9911796707
TMI Blog2012 (7) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... empted from payment of excise duty w.e.f 01/03/2007 vide notification No.6/2006-CE dated 01/03/2007. It was further noticed that the appellant were availing Cenvat credit on inputs received by them on or after 01/03/2007, which were intended to be used in the manufacture of Optical Disc Drives. It was also noticed that the appellant had taken Cenvat Credit in respect of the inputs lying in stock, work in progress and finished goods as on 01/03/2007 for the product Optical Disc Drives, which were exempted unconditionally w.e.f 01/03/2007. Therefore, they were required to reverse the Cenvat credit taken in respect of inputs lying in stock and also on inputs contained in work in progress and finished goods as on 01/03/2007 in terms of the provisions of Rule 11 (3) (ii) of the Cenvat Credit Rules, 2004. The investigation conducted revealed that the appellant had wrongly availed Cenvat credit of Rs.1,41,51,521/- in respect of inputs lying in stock and inputs contained in finished goods lying in stock as on 01/03/2007, which were exempt from duty and the said credit should have been reversed by them on 01/03/2007 itself. It was further noticed that even after 01/03/2007 the appellant ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. It is further contended that out of the demand of Rs.1,41,51,521/-, an amount of Rs.86,99,461/- pertained to the credit on certain quantity of inputs lying in stock as on 01/03/2007, which were subsequently used in the manufacture of ODDs exported under bond and, therefore, the amount of Rs.86,99,461/- stands reversed. They further submit that they have reversed the amount of Rs.1,08,57,065/- relating to the credit on inputs lying in stock on 01/03/2007, which were used in the manufacture of 50,400 units of final products exported by the DTA unit and credit on inputs contained in 12,500 number of final products lying in stock as on 01/03/2007, which were subsequently exported by the DTA unit. They further submits that they have exported these goods under ARE-1 procedure, which accounts for 62,900 numbers final products exported. 3.2 The Ld. Counsel also argues that out of the total demand of Rs.1,94,12,316/-, amount of Rs.86,99,461/- on 12,500 number of quantity of inputs lying in stock as on 01/03/2007 has been reversed and, therefore, the question of reversing the same again does not arise. The Commissioner in the impugned order has not accepted the aforesaid contention on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully considered the rival submissions. After hearing the arguments from both the sides, we are of the view that the appeal itself can be disposed of at this stage. Therefore, after granting stay of the dues adjudged, we take up the appeal for disposal. 5.1 The case of the department is that when their final product ODD became unconditionally exempt from excise duty w.e.f 01/03/2007, then in terms of Rule 11 (iii) of the Cenvat Credit Rules, 2004, the assessee should have reversed the Cenvat credit taken in respect of the inputs which are lying in stock or in process or is contained in the final product lying in stock. Inasmuch as the assessee failed to do this, they are liable to pay back the Cenvat Credit of Rs.1,41,51,521/- availed by them as on 01/03/2007 in respect of inputs. However, Rule 6 (6) (v) provides that the provisions of sub-rules (i) to sub rule (iv) shall not apply in case excisable goods removed without payment of duty are cleared for export under bond in terms of provisions of Central Excise Rules, 2002. The contention of the appellant is that they have exported a quantity of 62,900 units of ODD in the month of March 2007 vide ARE-1 Nos.1271 and 1272 dated 20/03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat Credit Rules, 2002 and Rule 6 (6) of Cenvat Credit Rules, 2004, used in the manufacture of such goods if the goods are exported. 5.4 They further held that from a bare reading of Rule 5 of Cenvat Credit Rule, 2004, a manufacture who exports the final products, which are exempts from duty can claim refund of Cenvat. So, the question is also answered against the appellants. 5.5 The Hon ble High Court of Bombay in the case of UOI Vs. Sharp Menthol India Ltd., reported in 2011 (270) ELT 212 (Bom) also held a similar view. 6. In the light of these judicial pronouncements, the demand of the department towards Cenvat Credit on the inputs used in the manufacture of export goods is not sustainable in law. However, it is for the assessee to lead evidence as to the quantity of inputs used in the manufacture of export products and the credit available in respect of such inputs and on submission of satisfactory evidence to that effect, the assessee would be entitled for the credit. 7. The next issue relates to inputs cleared as such by the appellant both in respect of inputs lying in stock as on 01/03/2007 and also in respect of inputs received after 01/03/2007. The assessee s contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
