TMI Blog2023 (2) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat referred to Rule 57 F(1) of the Rules, 1944 and held that inputs in respect of which credit is allowed under Rule 57A, may be used in or in relation to manufacture of a final product or could also be removed under intimation to the specified authority for home consumption in the said factory. Sub-rule 3 of Rule 3 of the CENVAT Credit Rules, 2002 makes it very clear that the Cenvat credit may be utilized for payment of any duty of excise on any final products or for payment of duty on inputs of capital goods themselves if such inputs are removed as such or after being partially processed or such capital goods are removed as such. Appeal dismissed. - CEA-37-2014 - - - Dated:- 2-2-2023 - HON'BLE MS. JUSTICE RITU BAHRI AND HON'BLE MRS. JUSTICE MANISHA BATRA Present: For the Appellant : Mr. Tejinder K. Joshi, Senior Standing Counsel. For the Respondent : Mr. Surjeet Bhadu, Advocate and Mr. Veer Singh, Advocate. **** Ritu Bahri, J. The revenue has come up in appeal against the judgment dated 20.03.2013 (Annexure A-3) passed by the learned Customs, Excise and Service Tax Appellate, Tribunal, Principal Bench, New Delhi whereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Unit-II, Lalru (Derabassi) under Rule 13 of the Cenvat Credit Rules read with Section 11AC of the Act. The stand taken by the respondent before the Customs Excise Service Tax Appellate Tribunal (in short 'Tribunal') was that C.R. Coils are basic raw material for G.P.Sheets as well as G.C.Sheets. Even if the process of conversion does not amount to manufacture in the Central Excise Act, the inputs can be cleared as such or after being partially processed on reversal of amount equivalent to credit availed on such inputs. With respect to demand of rebate claim amounting to Rs.88,71,269/- the stand was that as per Rule 18 of the Central Excise Rules, the exporter is entitled to claim rebate of duty paid on inputs as well as duty paid on final products. The Tribunal, while referring to the judgment passed by the High Court of Gujarat in the case of Commissioner of Central Excise vs. Delta Corporation reported in 2013 (287) ELT 15 (Guj.) held that credit could not be denied on the ground that no manufacturing activity was carried on by the assessee and hence the demand for disallowing Cenvat Credit was held to be unsustainable as the rules allowed the clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or after the first day of March, 2002. Explanation :- For the removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENVAT credit of additional duty leviable under Section 3 of the Customs Tariff Act on goods falling under heading 98.01 of the First Schedule to the Customs Tariff Act. (2) Notwithstanding anything contained in sub-rule (1), the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in process or inputs contained in the final products lying in stock on the date on which any goods cease to be exempted goods of any goods become excisable. A perusal of the Rule 3 of the CENVAT Credit Rules, 2002 shows that under sub rule (1) a manufacturer or producer of final products shall be allowed to take credit as referred above. It is further clarified in sub rule (1) that the manufacturer of the final products shall be allowed CENVAT credit of additional duty leviable under Section 3 of the Customs Tariff Act on goods falling under heading 98.01 of the First Schedule to the Customs Tariff Act. However, sub rule (3) is relevant, which is as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at was examining the manufacturing activity of item called P.D. Pumps and after purchasing such pumps, the manufacturer availed Modvat credit under Rule 57A of the Central Excise Rules, 1944. The view of the revenue was that the assessee had purchased the P.D. Pumps from its sister concern before clearance and the assessee was to reverse such credit. The High Court of Gujarat referred to Rule 57 F(1) of the Rules, 1944 and held that inputs in respect of which credit is allowed under Rule 57A, may be used in or in relation to manufacture of a final product or could also be removed under intimation to the specified authority for home consumption in the said factory. In para Nos. 9 and 10, it was observed as under:- 9. It was in this context that the Tribunal in the impugned judgment referred to and relied upon the decision of the Tribunal in case of Rico Auto Industries Ltd. v. CCE, New Delhi- I reported in 2003 (57) RLT 271-2003 (157) E.L.T. 170 (Tribunal), in which it was held that when inputs are subjected to certain process and the processed inputs are cleared on payment of duty which was more than credit taken, Modvat credit cannot be denied on the ground that the proces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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