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M/s. Same Deutz-Fahr India Pvt. Ltd. Versus Commissioner of Central Excise, Chennai-III

2017 (2) TMI 297 - CESTAT CHENNAI

CENVAT credit - whether the finished goods manufactured by the appellant, notified to be exempt with effect from 09.07.2004 disentitles the appellant to the Cenvat credit on inputs lying in stock, and inputs used in manufacture of finished goods prior to 09.07.2004 but such goods not cleared as on 09.07.2004 as well as input lying in work in progress (WIP) remaining in stock as on 09.07.2004? - Held that: - Law is well settled in Dai Ichi Karkaria Ltd.[], that there is no provision in the ru .....

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e to a manufacture on very day when raw material reaches factory, with a right to set off such credit against liability to discharge duty on clearance of output - appeal allowed. - Rule 8 of Cenvat credit Rules 2002 permitting carry forward of the unutilised Cenvat credit remained in the hands of the amalgamating company to be utilized by the amalgamated company, there is no question of any demand or recovery of the Cenvat credit amount from the appellant for which appeal is allowed. - E/799 .....

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stock, and inputs used in manufacture of finished goods prior to 09.07.2004 but such goods not cleared as on 09.07.2004 as well as input lying in work in progress (WIP) remaining in stock as on 09.07.2004. Input credit was taken by appellant prior to 09.07.2004 on the inputs reached to its factory. Status of exemption was known to the appellant only on 09.07.2004. 1.2 Appellant submits that the demand in the present case relates to the period prior to 09.07.2004. To support her contention that t .....

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pellant should succeed. 2. According to the learned counsel, Cenvat credit was taken as soon as the input reached factory and such inputs used in manufacture. In absence of any one to one relation between input and output, there shall be no deniability of the Cenvat credit taken by the appellant. 3. Revenue on the other hand says that the appellant should be denied credit for the reason that decision of the Tribunal in the case of Albert David Ltd. Vs Commissioner of Central Excise, Meerut repor .....

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oth sides and perused the records. 5. There is no dispute that some of the finished goods manufactured by the appellant prior to 09.07.2004 remained in stock on that date. Similarly some WIP was also in stock on that date. So also certain inputs were lying in stock on the said date. Cenvat Credit Rules, 2002 remained in force upto 09.09.2004 and from 10.09.2004, the Cenvat Credit Rules, 2004 came into force. The 2002 Rules granted Cenvat credit as soon as the inupt reached factory. There was no .....

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e of any one-to-one correlation between the input and the final product and Cenvat credit being available on day-to-day basis, there is no warrant in law to recover the Cenvat credit availed prior to 09.07.2004. 6. The judgment relied by Revenue in Albert David Ltd. (supra) was dismissed by a two judges Bench. But the ratio laid down in Dai Ichi karkaria Ltd. (supra) is by a three judges Bench. According to the rule of precedence, the judgment rendered by a bench of higher strength will prevail .....

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tral Excise Vs Sunwin Technosolution P. Ltd. reported in 2011 (21) S.T.R. 97 (S.C.). Therefore, the right vested on the appellant to get credit on the input came into its factory before 09-07.2004 remain unimpaired. Deniability on Cenvat credit on inputs reaching factory after 09.07.2004 may be possible. Law is also well settled in Dai Ichi Karkaria Ltd., that there is no provision in the rule to recover Cenvat credit in the event the goods manufactured prior to a cutoff date are cleared at a su .....

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