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OCM India Ltd. Versus CCE, Chandigarh-I

2016 (9) TMI 626 - CESTAT CHANDIGARH

Whether the appellant would be entitled to utilize the cenvat credit of duty accumulated prior to opting for Notification No. 30/04-CE dated 09.07.2004 - appellant paid duty on their final products making use of Cenvat Credit - opted to avail exemption under Notification 30/2004-CE w.e.f. from 03.08.2004 - appellant argued that cenvat credit forward from 2004 has been rightly earned by them and that the amendment introduced by the provision of Rules 11(3) of the Cenvat Credit Rules, 2004 will ha .....

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favour of appellant - 51706/2015 - Final Order No. A/60989/2016-EX[DB] - Dated:- 14-7-2016 - Mr. Ashok Jindal, Member (Judicial) and Mr. V. Padmanabhan, Member (Technical) Sh. R. Sudhinder, Advocate for the appellant Sh. Satya Pal, AR- for the respondent ORDER The Present appeal is directed engaged the order dated 29.01.2015 passed by the commissioner (Appeals), Chandigarh. The appellant is a manufacturer and processor of woolen fabrics, Man Made Fabrics, and Woollen yarn etc. falling under chap .....

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3.07. In terms of these provisions, the appellant reversed an amount of ₹ 1,33,01,111 towards inputs lying in or contained in the final product lying in stock which was consequent upon avoiding the exemption as per notification 30/2004 CE dated 09.07.2004. However, they carried forward a balance to the tune of ₹ 19,38,200/- in their cenvat credit account and intimated the said fact to the department. They started utilizing the same for payment of duty when part of their final product .....

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he amendment introduced by the provision of Rules 11(3) of the Cenvat Credit Rules, 2004 will have only prospective effect and cannot be used to lapse the credits accumulated by them. They further relied upon the decision of the Hon ble High Court of Karnataka in the case of Commissioner of C. Ex. Bangalore-II Vs. Gokaldas Intimate Wear reported in 2011 (270) ELT 351 (Kar.) in which a similar issue has been decided in their favour. 4. We have heard Sh. R. Sudhinder, Ld. Counsel for the appellant .....

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ts 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 other final product w .....

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nder a notification issued under section 93 of the Finance Act, 1994 (32 of 1994) 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 excisable goods, whether cleared for home consumption or for export or for payment of service tax on any other output service, whether provided in India or exported. 5. The appellant has opted to avail Noti .....

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(ii). The appellant has challenged the above view of the Revenue. They have taken the support of the decision of Hon ble high Court of Karnataka in the case of Commissioner of C. Ex. Vs. Gokldas Intimate Wear (Supra). We have gone through the said citation, we find that in the above case the Hon ble High Court of Karnataka had occasion to examine an identical issue and held as follows: 4. This Court in the case of the Commissioner Central Excise v. M/s. TAFE Limited (Tractor Division) dispo .....

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s. But the cenvat credit availed on such inputs till the date of exemption, they vest in the assessee and the assessee cannot be divested of that credit as the law does not provide for the same. Therefore, the authorities taking advantage of the notification exempting the final product cannot claim reversal of cenvat credit either in respect of final product which have come into existence on the date of the notification or on the inputs stored in the godown or the work in progress and finished p .....

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