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M/s Supertex Industries Ltd, Shri Balkrishna Sharma Versus Commissioner, Central Excise & Service Tax, Vapi

2015 (11) TMI 1337 - CESTAT AHMEDABAD

Benefit of Notification No.30/2004-CE - Reversal of CENVAT Credit - Non fulfillment of condition of notification - Held that:- Appellants have fulfilled the conditions of the notification and therefore, 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 no .....

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pondent : Shri Sameer Chitkara, A.R. (Addl. Commissioner) ORDER Per: P.M. Saleem 1. These appeals are filed by M/s Supertex Industries (Assessee-Appellant) and the employee of the Assessee, aggrieved by 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 February 2011 and March 2011 to December 2011. 2. The facts of the case are that the Appellants had opted on 01.04.2006 t .....

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ble in stock on 01.04.2006. They also cleared the finished goods which were in stock on 01.04.2006 on payment of duty. However, they had excess credit in CENVAT account on 01.04.2006 which pertained to the 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 01.04.2006. There was no clarity on 01.04.2006 regarding what is to be done with this excess CENVAT Credit which was available with them on the sa .....

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, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or (ii) the said final 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 othe .....

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the yarn waste subsequently. The Adjudicating authority in the impugned order, held that because of this utilization of excess credit they had in their account, which they did not lapse, the Appellant is not 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 February 2011 and March 2011 to December 2011. 4. Heard both sides. T .....

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on 01.03.2007, and has got only prospective effect. Since they had opted for the benefit of notification on 01.04.2006, a date prior to that i.e. 01.03.2007, these provisions are not applicable to them. He also argued in 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 .....

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filed written submission and compilation of case laws. 6. On the other hand, the learned Authorised Representative for the Revenue strongly contended that the Appellant had not only taken steps to lapse such CENVAT Credit which they had in their 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 the yarn waste. This has amounted to violations of the provisions of not only of .....

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ity. 7. On careful consideration of the submissions of both the sides and on perusal of the records, we find that the Appellant opted for the benefit of Notification No.30/2004-CE on 01.04.2006. 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 subsequent to .....

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ppellant should have expunged the credit on 01.03.2007. However, we do not agree that by virtue of not doing so, it will amount to taking of fresh credit. The Appellant had fulfilled the conditions of the notification on the date of their opting for the same. They also continued to observe the said conditions. The only lapse by them was that they had not expunged the excess credit they had in their account when sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004 was introduced on a subsequen .....

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