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2016 (6) TMI 572 - CESTAT NEW DELHI

2016 (6) TMI 572 - CESTAT NEW DELHI - 2016 (344) E.L.T. 620 (Tri. - Del.) - Exemption for manufacturing of body building on the procured chassis - condition on availing credit versus availing credit and reversing the credit @8% - notification 4/97 dated 01.03.1997 and subsequent notification no. 5/98 dated 02.06.1998 - whether the assessee was entitled to the exemption or not? - Held that:- As rightly observed by Commissioner (A) the assessee has reversed 8% of the value (whatever value it may b .....

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n be more also. As such it is absolutely necessary for the assessee so as to earn the benefit of the exemption notification to establish that the entire credit availed by them in respect of the inputs used in the manufacture of exempted goods stands reversed by them. If there is shortfall in such reversal, the assessee is required to be given an opportunity to reverse the same. At this stage both the sides submits that it may not be possible for them to exactly find out as to which input has gon .....

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ted product and consequently quantum of credit availed by the assessee. Subsequently by taking note of the 8% reversal already done by them, the quantum of differential credit, if any, would be arrived at which the appellant would be liable to reverse, so as to set the matter at rest. - Appeal No. E/2646/2006-EX(DB) - Final Order No. 51852/2016-EX(DB) - Dated:- 6-5-2016 - MS. ARCHANA WADHWA, MEMBER (JUDICIAL) AND SHRI V.PADMANABHAN, MEMBER (TECHNICAL) For the Petitioner : Shri Govind Dixit, DR F .....

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to be used by them and cleared their final product on payment of full rate of duty of 15% on the said vehicles. There is no dispute in respect of the said vehicle. 3. Apart from the above, chassis was also supplied to them by the persons other than chassis manufacturer. After doing the job of body building of the said chassis the same were being cleared by the appellant by availing exemption in terms of exemption notification 4/97 dated 01.03.1997 and subsequent notification no. 5/98 dated 02.06 .....

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amount of 8% of the value of their final exempted product in terms of the provisions of Rule 57CC(1) of Modvat Credit Rules. The Revenue not being in agreement with the above course of action adopted by the assessee initiated proceedings against them for payment of 15% of duty on their final product on the ground that the exemption was not available to them. However, the benefit of 8% reversal already made by them in terms of the provision of rule 57CC was extended to them and the demand for bal .....

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(A) observed that since 8% of the value of the goods was reversed by the assessee from their Cenvat Credit account, at the time of clearance of their final product, in terms of the provisions of Rule 57CC the same would amount to reversal of credit, in which case exemption notification would be available to the assessee. Accordingly, he set aside the impugned order of the original Adjudicating Authority and allowed the assessees appeal. Hence the present appeal by the Revenue. 6. After carefull .....

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of duty paid on inputs used by them. Even though the Revenue, in their memo of appeal have taken the stand that the assessee should have paid 8% on the total assessable value of the motor vehicle including the value of the chassis, but we are of the view that in as much as the provisions of Rule 57CC are itself not applicable on account of the fact that exemption notification was not available to the assessee, the said issue becomes irrelevant. 7. Here we find that the prime issue is the interp .....

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uestion here which arises and which has been accepted by Commissioner (A) is that by paying 8% of the value of the final product, in terms of the Rule 57CC, the appellant is deemed to have reversed the Cenvat Credit, in which case condition of the notification can be said to have been fulfilled and the same would be available to the assessee. For the above proposition he relied upon the Hon ble Supreme Court itself in the case of Chandrapur Magnet Wires (P) Ltd. Vs. CCE Nagpur 1996 (81) ELT 3 (S .....

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