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TMI Blog2023 (4) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... s unutilized balance of cenvat credit lying in their RG-3A part II, RG23C amounting to RS.32,32,703/-. A show cause notice dated 20.06.2011 was issued to the appellant wherein, it was contended that the cenvat credit reversed in the stock of materials/inputs contained in their finished goods WIP and subsequently, the finished goods manufactured out of the said materials on which cenvat credit has been reversed was cleared without payment of duty under notification no. 30/2004-CE dated 09.07.2004. 1.1 It was further contended that in terms of Rule 11(3) of Cenvat Credit Rules, 2004 that the appellant had carried forward, the balance of cenvat credit to the tune of Rs. 32,32,703/- as shown in ER-1 return for the month of June, 2006 is not correct and liable to be recovered for the reason that the appellant have cleared the goods under exemption from whole of the duty of excise in terms of Notification no. 30/2004-CE consequently, the balance cenvat credit after reversal could not have been carried forward as the same shall stand lapsed. The adjudicating authority accepting the charge made in the show cause notice confirmed the demand of cenvat credit along with interest and equal pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above Rule 11(3), it makes clear that in case if assessee opts for the exemption from whole of the duty of excise leviable on the said final product under a notification issued under Section 5(A) of the Act and the said final product has been exempted absolutely under Section 5A of the Act, after deducting the cenvat credit in respect of inputs lying in stock or in process or contained in the final product, the remaining amount shall lapse. The said rule provides that in any case, the cenvat credit on stock of input lying in stock, in process and contained in finished goods needs to be reversed however, as regard the balance cenvat credit after such reversal shall lapse only in a case where the exemption notification is absolute. In the present case, notification no. 30/2004-CE is not a absolute notification as the same contains condition as below: "Provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on input or capital goods has been taken under the provision of Cenvat Credit Rules, 2004" Since the above condition in such case in terms of clause (ii) of Rule 11(3) of Cenvat Credit Rules, 2004, the provision of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditional notification issued under Section 5A. The notification has the condition of non-availment of Cenvat credit. The sub-rule (3)(i) and (ii) of Rule 11 of the CCR, 2004 are separate. In the present case the sub-rule 3(i) would thus apply as per which the manufacturer is required to pay an amount equivalent to the Cenvat credit in respect of inputs used in the manufacture of said final product and is lying in stock or in process or is contained in final product lying in stock. In the present case all the conditions enumerated under sub-rule 3(i) has been followed by the Appellant and he is not required to reverse the entire credit lying in balance on the date of opting Notification No. 30/2004-C.E., dated 9-7-2004. Therefore, the balance credit is not liable to be reversed. For the same reason the credit utilised by him for clearance of finished goods or capital goods. We also find that on similar issues in the case of Wearit Global Ltd. - 2018 (8) TMI 1094- CESTAT, Janson Textile Processors - 2018 (7) TMI 850-CESTAT-Chennai and Sitaram India Ltd. - 2018 (10) TMI 11-CESTAT-New Delhi, the credit stands allowed to the manufacturer. 7. We, therefore, allow the appeals filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional provision. - ... ... ... (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the Cenvat credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, (i) he opts 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 whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported. 5.2 It is pertinent to note that the sub-rule 3(i) and sub-rule 3(ii) are separated by a semicolon (;) followed by the disjunctive, 'or'. The use of semicolon (;), the punctuation mark is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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