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M/s Sonalac Paints And Coatings Ltd. Versus Commnr. of Central Excise, Chandigarh

2015 (4) TMI 697 - SUPREME COURT

Denial of CENVAT Credit - SSI Exemption - delayed reversal of cenvat credit - in respect of inputs lying in stock or used in any finished excisable goods lying in stock on the date when option to avail exemption of duty was exercised - appellant had not debited the balance, when it had started availing the exemption from payment of duty but had done subsequently i.e. 03.10.2000 - Held that:- Commissioner took the view that merely because the earlier credit of ₹ 86 ,222 /- was debited on 03 .....

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nder the Notification. - interpretation given by the Commissioner on the facts of the present case is completely valid and correct. Contrary view which is taken by the CESTAT is unsustainable. - Decided in favour of assessee. - Civil Appeal No. 6342 of 2004 - Dated:- 15-4-2015 - A. K. Sikri And Rohinton Fali Nariman,JJ. For the Petitioner : Mrs Amita Gupta, Adv. Mr Joy Kumar, Adv. For the Respondent : Mr. K. Radhakrishnan, Sr. Adv. Mr Arijit Prasad, Adv. Ms Aruna Gupta, Adv. Mr B Krishna Prasad, .....

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er 32 and bituminous mixtures falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985. As per the appellant, it was availing MODVAT credit on all the movable inputs during the financial year 1999-2000. As on 31.03.2000, it had a closing stock of inputs and finished goods involving MODVAT credit of ₹ 86,222/- whereas the closing balance in RG-23A Part II was nil. With effect from 01.04.2000, it had started availing total exemption from payment of duty under Not .....

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payable on the finished goods manufactured and cleared by the appellant during the period 01.04.2000 to 16.09.2000. The main reason for issuance of show cause notice was that the appellant had not debited the balance of ₹ 86,222/- on 01.03.2000, when it had started availing the exemption from payment of duty under Notification 8/2000 but had done subsequently i.e. 03.10.2000. The appellant submitted reply to the show cause notice in which it was pleaded that all the conditions contained i .....

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nto consideration para 2 of Notification 8/ 2000 which lays down the conditions subject to which exemptions contained in the Notification were to be granted. It was found that all the conditions mentioned in para 2 were fulfilled by the appellant herein which is clear from the following discussion contained in the order dated 08.04.2002 passed by the Additional Commissioner (Audit), Chandigarh:- "There is no condition precedent that exemption under Notificaton No.8 /2000 shall be available .....

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only two conditions relating to modvat / cenvat credit are contained in sub- paras 2 (iii) and (iv). Accordingly to those paras no credit of duty paid on inputs used in the manufacture of the specified goods cleared for home consumption shall be availed and no credit of duty under rule 57Q with respect of capital goods shall be utilized with respect to the aggregate value of first clearances not exceeding Rs.One hundred lakhs." The Commissioner thus took the view that merely because the ear .....

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ification inasmuch as it nowhere provides that the MODVAT credit balance which was there with the appellant had to be debited before exercising the option to avail the exemption under the aforesaid Notification. After reproducing the Rule, the same is interpreted by the Commissioner in the following manner:- "4.6 .... Sub Rule (2) of Rule 57 AG of the Rules inter alia further provide that a manufacture who opts for exemption from the whole of the duty of excise leviable on the goods manufac .....

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