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TMI Blog2018 (4) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... 85. 3.The assessee, being a SSI Unit, had availed the benefit of exemption under Notification No.8/2003-C.E., dated 01.03.2003, as amended every year, since the inception of the Unit. Like that, during the years 2004-2005 and 2005-2006, though the assessee had availed the SSI exemption under notification as mentioned above, it had failed to pay the amount of duty under Rule 11(2) of Cenvat Credit Rules, 2004, equivalent to Cenvat credit availed by them on inputs and finished goods lying in stock as on 31.03.2005 and 31.03.2006. 4.Because of such alleged non payment of duty or for reversal of Cenvat credit under Rule 11(2) of Cenvat Credit Rules, 2004, the revenue issued a show cause notice on 28.03.2007, requiring the assessee to show cause as to why the amount of duty and education cess, should not be demanded with interest from the assessee under Rule 14 of Cenvat Credit Rules, 2004. 5.It is the claim of the assessee that during February and March, 2006, the assessee crossed the limit of claiming exemption under SSI notification. Hence, the assessee started to pay excise duty on their clearances in February and March, 2006. 6.For the inputs/raw materials purchased and receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) dated 21.05.2009, the revenue preferred an Appeal before the CESTAT, Chennai, the CESTAT, in its order dated 18.08.2011, reversed the said decision of the Commissioner (Appeals) and allowed the appeal filed by the Revenue. 14.Aggrieved over the said Final Order passed by the CESTAT, Chennai, in Final Order No.1021/2011 dated 18.08.2011 in Appeal No.E/489/2009, the assessee preferred this Civil Miscellaneous Appeal before this Court. 15.We have heard Mr.K.Jayachandran, learned counsel appearing for the appellant/assessee and Mr.A.P.Srinivas, learned Standing Counsel appearing for the Revenue. 16.The instant appeal had been admitted on 13.02.2012 with the following substantial questions of law: (a) Whether in the facts and circumstances of the case, Rule 11(2) of Cenvat Credit Rules, 2004, provides the manufacturer shall be required to pay an amount equivalent to the Cenvat Credit allowed to him in respect of inputs lying in stock or in process or contained in final product lying in stock? (b)Whether the Tribunal is right in holding that the credit of duty paid on inputs utilized in the manufacture of exempted goods is recoverable, as the credit was correctly taken when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by simply following the decisions made in Albert David Limited of the Principal Bench of CEGAT, New Delhi, dated 28.11.2002, stating that the same has been confirmed by the Hon'ble Apex Court. However, the fact remains that when the order of the CEGAT was appealed by the assessee in that case before the Hon'ble Apex Court, there was no detailed finding given and it was a summary disposal of the appeal by the Hon'ble Apex Court and therefore, the said decision ought not to have been pressed into service by the CESTAT. The learned counsel appearing for the assessee would further argue that, the decision of the High Court of Himachal Pradesh at Shimla in the matter of Commissioner of Central Excise, Chandigarh v. Tyre Tops reported in 2010 (250) E.L.T. 338 (H.P.), should have been taken into account, which is exactly on the point raised in this case. 21.The learned counsel appearing for the assessee would further submit that, since nowhere in the show cause notice, it was stated about the invocation of proviso to Section 11A of the Customs and Central Excise Act, for demanding the duty for the extended period, such an exercise would be wholly unjustifiable and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the decision taken by the CESTAT in the order impugned fully relying upon the decision of the Tribunal's Principal Bench in Albert David's case, is fully justifiable, because the said case of the Tribunal has been confirmed by the Hon'ble Apex Court in 2003 (157) E.L.T. A.81, (SC). 27.The learned Standing counsel would further submit that, in the said decision, the Hon'ble Apex Court has held that, the credit taken on inputs used in the manufacture of goods, which were subsequently exempted, had recoverable, when the demand raised only in respect of inputs lying unutilized. By raising these points, the learned Standing Counsel would submit that, the order of the CESTAT is fully sustainable, in view of the said decision in Albert David's case, which is holding the field and therefore, the impugned order of the CESTAT, does not require any interference from this Court. 28.We have considered the said rival submissions made by the learned respective counsel appearing for the parties and also perused the materials placed before this Court. 29.As has been rightly pointed out by Mr.A.P.Srinivas, learned Standing counsel appearing for the revenue, the only issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on 31.3.2006. The assessee has commenced paying full rate of duty after availing cenvat credit from Feb 2006. The assessee has purchased imported scrap of 72.46 MTS during Feb 2006 to March 2006. The assessee has issued 20.600 MTS towards production. In as much as the assessee had a balance of 348.99 MTS of imported scrap on which cenvat was not availed by them, it has to be reckoned that the issue of 20.60 MTS was from the balance of stock as on 31.3.2006 according to First in First Out Principle. Hence, it is clear that the closing stock of 400.85 MTS contains 72.40 MTS of imported scrap on which cenvat credit has been availed. The cenvat credit availing being Rs. 1,56,090/- duty & Rs. 3,122/- Education Cess vide BE No.970758 dated 28.2.06. b)Cenvat Scrap Stock: NIL Qty. in MTS Period OB Receipt Issued for prodn Second sales CB Remarks Apr. 2005 to Jan. 2006 4.45 1050.815 4.450 1050.815 0 Exempted Period Feb.2006 to March 2006 0 90.87 90.87 0 0 Dutiable Period In as much as the cenvat scrap is NIL as on 31.03.2006 no duty is reversible/payable b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Description Duty (Rs) Edu.Cess (Rs.) a) Duty payable on imported scrap of 400.85 MTS. As per Sl.No.9(a) of this notice 156090 8122 b) Duty payable on cenvat availed scrap of 90.87 MTS contained in the finished goods & Misrolls available on stock as on 31.03.2006 as per Sl.No.9(c) of this notice 171187 3482 d) Total 327277 11604 e) Less Closing Balance in Cenvat Account RG23A Part II 17315 339 f) Amount to be paid by the assessee as on 31.03.2006 309962 11265 g) Less payment made by the assessee in this regard vide GAR-& challan dated 3.1.07 53294 1087 h) Balance Amount payable by the assessee 256668 10178 It is stated that the assessee had not reversed any cenvat credit as on 31.03.2006. After the visit of Officers of Headquarters Preventive Unit on 22.12.2006, the assessee has hurriedly calculated the lying stock credit to be paid and an amount of Rs. 60,000/- vide GAR-7 challan dated 3.1.07. However, as per the findings of the preventive Unit an amount of Rs. 3,09,962/- duty and Rs. 11,265/- Education Cess should have been paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case in the said Albert David Limited was that, the assessee in that case has taken a Cenvat credit in their books of account, on the I.V. Fluids, which were chargeable to duty and subsequently, the said I.V. Fluids, were exempted from payment of duty and the revenue seems to have sought for demand only in respect of unutilized inputs, which were lying at the assessee's premises on the date, it became duty free. 37.Considering these aspects, the Tribunal has given its finding in the said Albert David's case, which are extracted herein for easy reference: "5.We have considered the submissions of both the sides. The undisputed facts are that the Cenvat credit was taken by the Appellants in their books of account when the I.V. Fluids were chargeable to duty. Subsequently, the I.V.Fluids were exempted from payment of duty. The Revenue has sought demand only in respect of the inputs which were lying unutilized. It is also not in dispute that these inputs are being used in the manufacture of I.V.fluids which are wholly exempted from payment of duty. The Cenvat Credit Scheme is a scheme to remove the cascading effect of the Central Excise duty as the same is levied at each sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in manufacture of goods, during the time of exemption in respect of input lying unutilized. 40.Here in the case in hand, it is an admitted fact that from the inception, the assessee had been availing the SSI Unit exemption. The said exemption under Notification No.8 of 2003,-C.E., dated 01.03.2003 had been given based on the quantum, and once the Unit exceeds the quantum, it will automatically lose the exemption facility and again, if it comes back within the quantum, it can start seeking exemption. On this basis, it is the assessee's own case that the assessee crossed the SSI Unit exemption limit. Therefore, it loses the exemption under notification. Therefore, admittedly, in February and March 2006, the assessee was not in the zone of SSI exemption and therefore, it started to pay the excise duty. For the SSI Unit claiming exemption, if at all any Cenvat credit claimed, the same is reversable during the exemption period. 41.However, the fact remains that as per the stock available based on the Stock Register and other documents, which were verified by the revenue that, on closing of stock of 400.85 MTS contains 72.46MTS of import scraps on which Cenvat credit was ava ..... X X X X Extracts X X X X X X X X Extracts X X X X
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