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2015 (11) TMI 1336 - CESTAT AHMEDABAD

2015 (11) TMI 1336 - CESTAT AHMEDABAD - TMI - Reversal of CENVAT Credit - Notification No.30/2004-CE, dt.09.07.2004 - Held that:- Appellant opted for the benefit of Notification No.30/2004-CE on 01.08.2005. They reversed the credit on the inputs lying in stock, and also cleared the finished goods in stock on payment of duty. Therefore, they had met with the conditions of notification on the date of opting for the benefit of notification. They did not take any fresh credit on the inputs received .....

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efore, they are eligible for the benefit of the said notification. Any violation of sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004 should invite necessary action under Rule 14 & 15 of CENVAT Credit Rules 2004 only and cannot be extended to the extent of denying the benefit of the substantial notification for that mere reason. We therefore, do not find force in the findings of the Adjudicating authority in this respect in the impugned order. The same cannot be sustained. - Impugned order .....

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the common Order-in-Original issued by Commissioner, Central Excise & Service Tax, Vapi in respect of two show cause notices on the same issue for the period April 2006 to July 2010 and August 2010 to January 2012. 2. The facts of the case are that the Appellants had opted on 01.08.2005 to avail duty free clearance of their finished products under the provisions of Notification No.30/2004-CE, dt.09.07.2004. Proviso to the said notification states that provided that nothing contained in this .....

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e credit of duty on inputs which were already utilised in the manufacture of the finished goods which were already cleared on payment of duty before 01.08.2005. There was no clarity on 01.08.2005 regarding what is to be done with this excess CENVAT Credit which was available with them on the said date of opting the said notification. However, subsequently, on 01.03.2007, sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004 was introduced. The said rule is reproduced below:- (3) A manufacturer .....

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inal product has been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse 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. 3. The contention of the Revenue is that once the .....

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ot eligible for the benefit of exemption under Notification No.30/2004-CE. He, therefore, denied the duty exemption to the finished goods under Notification No.30/2004-CE in regard to the clearances made during April 2006 to July 2010 and August 2010 to January 2012. 4. Heard both sides. The learned Counsel for the Appellant submitted that sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004, which is a separate provision, is not a part of the Notification No.30/2004-CE. He argued that they h .....

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the alternative that even if there is violation of sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004, action for the same can be taken under the provisions of Rule 14 & 15 of CENVAT Credit Rules 2004, and denial of the benefit of exemption provided under Notification No.30/2004-CE is not justified, when the conditions under the said notification have been fulfilled. 5. The learned Counsel also submitted that the same Adjudicating authority on identical issue in the case of M/s Rungta .....

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ir account on 01.03.2007 when the sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004 came into effect, but also utilised a portion of the same to pay duty on clearance of capital goods. This has amounted to violations of the provisions of not only of the said sub-rule (3), but also the proviso to the Notification No.30/2004-CE. He argued that carrying forward the excess credit tantamount to the Appellant availing fresh credit which was utilised for clearance of capital goods. As the Notific .....

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stock, and also cleared the finished goods in stock on payment of duty. Therefore, they had met with the conditions of notification on the date of opting for the benefit of notification. They did not take any fresh credit on the inputs received subsequent to the said date. These facts are not disputed. The bone of contention is regarding the excess credit the appellant had in their account on 01.08.2005. There were no instructions or legal requirement to expunge (lapse) the said excess credit o .....

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