TMI Blog2015 (10) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant utilized the carried forward CENVAT credit towards discharge of their duty liability in respect of goods i.e. aggregates, components and parts of tractors. This undisputed facts would mean that the appellant herein was not manufacturing only exempted agricultural tractors but was also manufacturing other products on which duty liability arises. - from bare perusal of the sub-rule the same will apply only in a situation where final products are exempted and lying in stock. In our considered view the above sub-rule may not be applicable in the facts of this case which is not disputed that there is a discharge of Central Excise duty liability on the other finished products manufactured and cleared like aggregates, components & pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 1,05,98,681/- utilized / paid by them on clearances made to DTA through such CENVAT credit be not demanded with interest. Appellant contested the issue on merits. The adjudicating authority after following due process of law, did not agree with the contention raised by the appellant holding that the provisions of Rule 11 of Cenvat Credit Rules, 2004 will be attracted and the credit lying in balance when the appellant switched over from EOU to DTA need to lapse as the appellant's final product agricultural tractors were fully exempted with effect from 01.03.2006. 3. Learned Consultant appearing on behalf of the appellant would take us through the entire case records. He would submit that the adjudicating authority has err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shree Baba Exports - 2015 (318) ELT 328 (Tri.Del). 4. Learned D.R. would read the findings recorded by the adjudicating authority in the impugned order and more specifically paragraphs 18 to 20. It is his submission that the main manufacturing activity of the appellant is agricultural tractors, aggregates and components parts thereof may not be main manufacturing activity. It is his submission that when inputs are procured for manufacturing of agricultural tractors, provisions of Rule 11 Cenvat Credit Rules will direct apply. He would then read the provisions of Rule 11 of the Cenvat Credit Rules. It is his submission that sub-rule 3 of Rule 11 of Cenvat Credit Rules will be applicable in this case and the adjudication authority has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity on other products manufactured by them. 6.2 We find from the impugned order that the adjudicating authority has not disputed the fact that the appellant utilized the carried forward CENVAT credit towards discharge of their duty liability in respect of goods i.e. aggregates, components and parts of tractors. This undisputed facts would mean that the appellant herein was not manufacturing only exempted agricultural tractors but was also manufacturing other products on which duty liability arises. On the background of such factual matrix, we have to consider the provisions of sub-rule 3 of Rule 11 which reads as under:- Sub-rule of Rule 11: (3) A manufacturer or producer of a final product shall be required to pay an amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Bench recorded as under: 7.1 From a perusal of this sub-rule, it is clear that this sub-rule would be applicable if the some Cenvat credit availed inputs are being used for manufacture of a final product and that final product has become fully exempt from duty. In such a situation, the assessee would be liable to pay an amount equal to the Cenvat credit involved in respect of the inputs lying in stock or in process, or contained in the final products lying in stock on the date of exemption, and after deducting this amount from the Cenvat credit balance, if any, as on the date of exemption, if any Cenvat credit balance still remains, it shall lapse and the same shall not be allowed to be utilized for payment of duty on any goods w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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