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John Deere (I) Pvt. Ltd. Versus Commissioner of Central Excise, Mumbai

2015 (10) TMI 2272 - CESTAT MUMBAI

Denial of Carry forward of CENVAT Credit - Conversion of DTA to EOU - Held that:- It can be seen from the Rule 11(3) that it will apply only in the situation where final products are exempted. Undisputed fact is that the final products manufactured by appellant in EOU and cleared for export are not dutiable, but the very same final products when cleared into DTA becomes dutiable hence the provisions of Section 5A of the Central Excise Act, 1944 which are sought to be applied by the adjudicating .....

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r of assessee. - Appeal No. E/85524/13 - Final Order No. A/3154/2015-WZB/EB - Dated:- 31-8-2015 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) For the Petitioner : Shri S.A. Gundecha, Advocate For the respondent : Shri Ajay Kumar, Jt. Commr (AR) ORDER Per: M.V. Ravindran This appeal is directed against order-in-original 26/P-III/COMMR/C.Ex/2012-13 dated 08.11.2012. 2. The relevant facts that arise for consideration are appellant herein was a DTA unit and applied .....

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ue authorities were of the view that appellant having converted himself in an EOU cannot have carried forward the unutilized CENVAT credit. Coming to such a conclusion a show-cause notice was issued demanding reversal of such CENVAT credit as also the amount unutilized for discharging the duty liability, interest thereof and proposing for imposition of penalties. Appellant contested the show-cause notice on merit. Adjudicating authority after following due process of law, confirmed the demands w .....

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11 of the Cenvat Credit Rules, 2004 as also the Section 5A of the Central Excise Act, 1944. He would submit that the findings of the lower authorities are totally mis-directed in as much appellant had exported the tractors and parts thereof while clearances to DTA from EOU were chargeable to Central Excise duty and during the period in question, CENVAT credit was allowed on the goods which were brought into EOU. He would read the Notification No. 24/2003-C.E. and also submit that the final produ .....

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td. 2012 (278) ELT 616 (Tri. Mum) and submit that in the said case, the Bench had held that conversion from EOU to DTA, Modvat scheme is not applicable and the credit lying in balance is to lapse. He would also take us through the findings recorded by the adjudicating authority and submit that the products manufactured by the appellant were exempted. 5. We have considered the submissions made at length by both the sides and perused the records. 6. On perusal of the records, we find that the issu .....

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the carried forward CENVAT credit into DTA. 6.2 On this factual matrix, we analyse the provisions of Rule 11(3) of Cenvat Credit Rules, 2004 which reads as under. Sub-rule (3) of Rule 11 : 3) manufacturer or producer of a final product shall be required to pay an amount equivalent to the Cenvat credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if .....

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nal product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported. 6.3 It can be seen from the above reproduced sub-rule that it will apply only in the situation where final products are exempted. Undisputed fact is that the final products manufactured by appellant in EOU and cleared for export are not dutiable, but the very same final products when cleared into DTA becomes dutiable hence the provisions of S .....

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wn case. Relevant paragraphs are reproduced herein below. 6.3 It can be seen from bare perusal of the said 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 & parts of tractors. The above .....

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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 whether cleared for home consumption or for export. In our view, this sub-rule would not ap .....

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