TMI Blog2024 (3) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... that the cited Explanation has retrospective effect. The denial of credit was not enforced immediately upon grant of exemption; instead resort was had to section 11A of Central Excise Act, 1944 and, consequently, rebate was not an available option. This militates against the contention of Learned Authorized Representative that the cited Explanation has retrospective effect. We, therefore, examine the entitlement in terms of operation under the CENVAT credit scheme. As we have premised, this is a dispute about eligibility for retention of credit availed validly under rule 3 of CENVAT Credit Rules, 2004. It is only upon deployment of such goods in the production of exempted goods , which menthol crystal was since 1st March 2008, that rule 6(1) of CENVAT Credit Rules, 2004 is brought to bear - to the extent that inputs were deployed in goods that have been exported, availment of credit is not faulted. Even if exempted goods were removed on bond for export after March 2010, that procedural lapse, with its own attendant consequence, has no bearing on eligibility for retention of credit. Therefore, only the availment of credit in relation to inputs used in production of domestically cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under bond while resorting to default mechanism for discharge of obligation under rule 6 of CENVAT Credit Rules, 2004 on goods cleared domestically, continued to accumulate credit as well as claimed refund thereof in terms of rule 5 of CENVAT Credit Rules, 2004. This, however, was no longer possible after May 2010 with notification no. 24/2010-CE dated 26th May 2010 excluding exempted goods from availing procedure contained in notification no. 42/2001-CE (NT) dated 26th June 2001 for clearance under bond. Seven notices for recovery of credit availed on procurement of inputs used in manufacture of menthol crystal since its exemption from duties of central excise were disposed off in order [order-in-original no. Belapur/96-102/Taloja/R-III/COMMR/KA/ 2013-14 dated 30th September 2013] of Commissioner of Central Excise, Belapur confirming recovery of ₹23,32,699 under section 11A of Central Excise Act, 1944, along with applicable interest under section 11AB of Central Excise Act, 1944, besides imposing penalty of like amount under section 11AC of Central Excise Act, 1944. 3. Learned Counsel for appellant submitted that, in one process, mentha oil is deployed for production of men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, and packing materials attributable to process that did not yield any other products which was proposed in notice dated 2nd April 2009. Thereafter, four notices dated 22nd December 2009, 29th September 2010, 17th January 2011 and 5th April 2011 were issued for recovery of ₹ 9,85,96,256, ₹ 5,29,07,035, ₹ 4,64,16,404 and ₹ 50,08,438, totaling ₹ 30,15,24,389, availed as credit for the period from January 2009 to September 2009, October 2009 to December 2009, January 2010 to May 2010 and March 2010 to May 2010. Further, founded on resort to rule 11 of CENVAT Credit Rules, 2004, credit of ₹ 8,21,95,386 pertaining to inputs used in finished, and semi-processed, menthol crystals as on 1st March 2008 and credit of ₹ 13,27,920, pertaining to inputs used in finished, and semi-processed goods, that were exempted with effect from 27th February 2010 were also proposed for recovery in two other notices. 6. The impugned order has held that, to the extent that excisable goods are manufactured using the inputs , there is no breach of entitlement to credit implying thereto that denial after 1st March 2010 is not questionable. Placing reliance on the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it that the dispute is only about retention of credit that enabled obtaining of refund under rule 5 of CENVAT Credit Rules, 2004. 8. That the appellant was exporting almost 98% of turnover for the period upto March 2010 and about 87% thereafter is a finding in the impugned order that has not been controverted in appeal of Revenue. That such exports should not have to bear the burden of duties inhering in the goods is undeniable and, therefore, if not refund under rule 5 of CENVAT Credit Rules, 2004, rebate was allowable under Central Excise Rules, 2002 with option left to assessee. The denial of credit was not enforced immediately upon grant of exemption; instead resort was had to section 11A of Central Excise Act, 1944 and, consequently, rebate was not an available option. This militates against the contention of Learned Authorized Representative that the cited Explanation has retrospective effect. We, therefore, examine the entitlement in terms of operation under the CENVAT credit scheme. As we have premised, this is a dispute about eligibility for retention of credit availed validly under rule 3 of CENVAT Credit Rules, 2004. It is only upon deployment of such goods in the produc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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