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2015 (10) TMI 2272 - CESTAT MUMBAI

2015 (10) TMI 2272 - CESTAT MUMBAI - 2016 (333) E.L.T. 440 (Tri. - 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 .....

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impugned order is unsustainable and liable to be set aside - Decided in favour 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 .....

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t for discharge of duty on the goods which are cleared to DTA from EOU. Revenue 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. Adjud .....

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1999 was also pressed into service. He would take us through the entire Rule 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 woul .....

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ent of the Tribunal in the case of Indira Gandhi Mahila Sahakari Soot Girni Ltd. 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 .....

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le to be discharged and to discharge such Central Excise duty, appellant used 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 i .....

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e and shall not be allowed to be utilized for payment of duty on any other final 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 fi .....

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s Tribunal in final order No. A/2996/15 dated 08.09.2015 in the appellants own 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 manufacture .....

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rom 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 whether cleare .....

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