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M/s Bharat Rolling Mills Versus Commissioner of Central Excise, Allahabad

2015 (10) TMI 2520 - CESTAT ALLAHABAD

Cenvat credit - Violation of provisions of Cenvat credit rules read with rule 2(iii) of Notification No. 8/2003 - Appellant took credit prior to 18/11/2009, date from which SSI exemption limit has been exceeded - Held that:- the appellant have only taken and not utilized the Cenvat credit prior to 18/11/09, when it started paying tax on the clearances, I hold that it is only a venial breach of the provisions. In such circumstances the substantial benefit should not be denied to the appellant. Ac .....

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.C. (A.R.) for the Department ORDER The Appellant, M/s Bharat Rolling Mills, is in Appeal against Order-in-Appeal No.236/CE/Alld/2011 dated 11.11.2011 passed by Commr. (Appeals) of Central Excise, Allahabad. 2. The facts in brief are that the appellant is a manufacturer of MS Rounds, MS Strips & M.S. Square falling under chapter sub-heading 72221119, 72111450 of the first schedule to the CETA, 1985. The appellant was availing exemption as an SSI unit under no .....

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ts contained in the final products lying in the stock on the date on which such goods manufactured by the said manufacturer, ceased to be exempted goods. 2. The revenue authority came for inspection on 25/11/09 wherein they found that the appellant in the Financial Year 2009-10 have crossed the exemption limit of 150 lakhs. It also appeared that under Rule 3 sub rule 2 of CCR the appellant was entitled to take/ avail Cenvat credit of the duty paid on inputs lying in stock or in proces .....

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ts under Rule 3 or 11 of the Cenvat credit rules used in manufacture of the specified goods, cleared for home consumption during the period of exemption (SSI). Accordingly show cause notice dated 11/3/2010 was issued calling upon the appellant as to why not the Cenvat credit amounting to ₹ 1,30,864/- availed on inputs during the period 01/4/09 to 18/11/09 be not demanded and recovered along with interest under section 11 A read with rule 14 of CCR. It further appeared that the appellant is .....

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onth from 18.11.2009 in anticipation and under conscious knowledge that the inputs on which credit had been taken shall not be utilized in clearance of goods under exemption. It was further contended that the appellant had only taken credit and not utilized the same and as such there is only a technical breach of the provisions of rule 3 (2) of the CCR as admittedly there had been no utilisation of the credit. As regards the usage of two invoices books simultaneously the appellant informed to re .....

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ty is fit to be dropped. 4. The SCN was adjudicated vide order-in-original dated 30/3/2011 wherein the Cenvat credit of ₹ 1,30,864/- was demanded, being held inadmissible under section 11 A(l) read with rule 11 (2) of CCR along with interest. Further equal amount of penalty was imposed under rule 15 (1) of CCR observing that on the plain reading of rule 3 of CCR, makes it clear that the manufacturer of the final product shall be allowed to take Cenvat credit of the duty paid on .....

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nt have violated the rule and is liable to penalty and accordingly penalty of ₹ 5000/- was imposed under rule 27. 5. Being aggrieved the appellant preferred appeal before the Commissioner Appeals, vide the impugned order dated 11/11/2011, held that the Provisions are mandatory as the phrase "shall be" and "shall avail" manifestly emphasize that the manufacturer are not allowed to avail the credit of duty on inputs until the aggregate value of first clearances .....

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this Tribunal. The Id. Counsel urges that under the facts and circumstances there is only a venial breach of the provisions of law. That there is no case made out of availing inadmissible Cenvat credit. Accordingly the court below erred in disallowing the Cenvat credit and holding the same is recoverable. The Id. Counsel urges that as the credit is legally admissible, only for the sake of venial breach, the substantial benefit should not be denied. As regards penalty under rule 27 for the viola .....

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