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M/s Avon Cycles Limited and M/s Hero Cycles Limited Versus C.C.E, Ludhiana

2016 (9) TMI 628 - CESTAT CHANDIGARH

Whether the provisions of Rule 6(3) of the cenvat Credit Rules are applicable or not and whether the Cenvat Credit shall lapse on 29.04.2008 when e-bikes became exempted from levy of duty or not - manufacture of exempted i.e. e-bikes and dutiable i.e. its parts - import of e-bikes in CKD condition and clearing the same alongwith indigenously procured battery and paying 10% of duty thereon - e-bikes are exempted from levy of duty as per Notification No.25/2008 dt. 29.04.2008 - non-maintenance of .....

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at the time of their clearance and the cenvat credit lying in their cenvat account shall not lapse wholly but the cenvat credit lying in their cenvat account attributable to inputs, work in progress and finished e-bikes shall lapse. As we hold that the provisions of Rule 6(3) are applicable to the facts of the present case, therefore, the provisions of Rules 11(3) of the Cenvat Credit Rules are not applicable. - Decided in favour of appellant - E/2701, 2702, & 2862/2010 E/2583 to 2585 of 2012 - .....

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25/2008 dt. 296.04.2008, the E-bikes were exempted from levy of duty, but the assessee preferred to pay 10 % value of the e-bikes on their clearance even after exemption notification of the premise that as assessee is manufacturing both e-bikes and parts thereof and parts are dutiable and assessee is not maintaining separate account of inputs of dutiable as well as exempted final products, therefore, as per Rule 6(3) of the Cenvat Credit Rules, 2004, the assessee is required to reverse 10% of th .....

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s 11(3) of the Cenvat Credit Rules. 2004 and sought to demand duty on the E-bikes parts cleared by the appellant after 29.04.2008. The show cause notices were adjudicated, the adjudicating authority confirmed the demand alongwith interest and penalties were also imposed. Some of the said orders were challenged by the assessee before the commissioner (Appels) who granted relief to the assessee. Aggrieved from the order of Commissioner (appeals) Revenue is before us and aggrieved from the adjudica .....

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appellant is clearing e-bikes and parts thereof. Admittedly, w.e.f. 29.04.2008 e-bikes became exempt from duty but parts remain to be dutiable and the assessee was not maintaining separate account of dutiable as well as exempted goods, therefore, the assessee was paying 10% of the value of e-bikes at the time of their clearance and clearing parts of e-bikes on payment of duty by utilizing their cenvat account. In that circumstances, the allegation of the Revenue is not sustainable that the cred .....

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ty is demandable on clearance of parts of e-bikes by the assessee. 6. Heard the parties considered the submissions. 7. We find the after hearing the parties the issue is an under: (i) Whether the provisions of Rule 6(3) of the cenvat Credit Rules are applicable to the present case? (ii) Whether the Cenvat Credit shall lapse on 29.04.2008 when e-bikes became exempted from levy of duty or not? 8. The Facts of the case are not in dispute that assessee is importing e-bikes in CKD condition and clear .....

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assessee is clearing e-bikes and parts prior to 29.04.2008 on payment of duty. 9. The ld. Commissioner (Appeals) has also observed the same in the impugned order which is reproduced as under: 5. I have carefully gone through the records of the appeals as well as the submissions made by the appellants in the grounds of appeals. The issue involved in both the appeals is identical therefore, these are being taken up for disposal under this common order. The main issue required to be deliberated upo .....

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bikes and parts of E-bikes. The latter gets manufactured as per Section 2(f)(iii) of the Act read with third schedule to the Central Excise Act and Notification No. 2/2006-CE(NT) dated 01.03.2006 or Notification No. 14/2008-CE(NT) dated 01.03.2008. Notification No. 49/2008-CE(NT) dated 24.12.2008. Appellants have also argued that credit accumulated, due to higher credit admissible on inputs and less duty leviable on E-bikes, over a period of time and discharging of liability as per Rule 6(3) by .....

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ation, marked as Annexure-K to the appeal memorandum Serial No. 14 of this application and the declaration made by the Appellants while obtaining Central Excise Registration, is as follows: 14. Major excisable goods manufactured, warehoused or traded (description and CETSH) (Please see instruction No.15) (i) ELECTRIALLY OPERATED BIKES (E-BIKES) CH. HEADING 87119091 (ii)________ (iii)________ 7. From the above proforma and declaration given by the Appellants, it is clear that this part of the reg .....

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, clearly indicates E-bikes parts, falling under Central Excise Tariff Heading 8714, cleared during the relevant period alongwith the rate of duty and amount of duty paid in the relevant columns of ER-1 returns filed. Further, the returns filed by the appellants indicate the quantity manufactured, quantity cleared and the assessable value. In view of the above factual details, it cannot be said that Appellants were not manufacturing E-bikes parts, falling under Central Excise Tariff Heading 8714 .....

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) of the Credit Rules for common inputs. It is established that appellants were clearing E-bikes parts on payment of Central Excise duty deemed manufactured goods then it has to be held that parts imported by the Appellants during the relevant period used for manufacturing both excisable E-bikes parts and fully exempted E-bikes, E-bike parts were always subjected to duty as deemed manufacture before and after issue of Notification No. 25/2008-CE dated 29.04.2008. It is also validly put forth by .....

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ikes in CKD condition w.e.f. 01.07.2008 vide Bill of Entry No. 531 dt. 01.07.2008. It means part in CKD condition which distinguished from other common parts like batteries etc. The CKD parts were, therefore distinguishable and relatable to the finished E-bikes. The credit with respect to such CKD part lying as such or in works-in-progress or those contained in the finished E-bikes as on 29.04.2008 was required to be reversed under the Credit Rules. To that extent impugned orders is required to .....

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