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2015 (10) TMI 1185 - AT - Central ExciseDenial of CENVAT Credit - Reversal of CENVAT Credit - stocks of the semi-finished goods and stock of purchase - SSI Exemption - whether the Appellant while opting SSI exemption, they are required to reverse the CENVAT Credit on the stock of semi-finished goods (clinkers) and processed material lying in the factory as on 31.03.2007 - Held that - Punjab & Haryana High Court in the case of CCE Chandigarh Vs. M/s C.N.C. Commercial Ltd - 2007 (10) TMI 203 - HIGH COURT PUNJAB AND HARYANA dismissed the appeal on the identical issue Notification No.08/2001-CE, dt.01.04.2001 - Similar view was taken by Hon ble Andhra Pradesh High Court in the case of Commissioner of C.Ex., Tirupati Vs Suvera Processed Foods Pvt.Ltd. - 2014 (10) TMI 560 - ANDHRA PRADESH HIGH COURT . The Larger Bench of the Tribunal in the case of H.M.T. Vs Commissioner of Central Excise, Panchkula - 2008 (10) TMI 54 - CESTAT, NEW DELHI held that the input-credit legally taken and utilized on the dutiable final products, need not be reversed on the final product becoming exempt subsequently. - impugned order cannot be sustained and it is set aside. - Decided in favour of assessee.
Issues:
1. Whether the Appellant is required to reverse the CENVAT Credit on the stock of semi-finished goods and processed material while opting for SSI exemption under Notification No.8/2003-CE. Analysis: The Appellate Tribunal, after considering the arguments from both sides and reviewing the records, determined that the Appellants are involved in the manufacturing of Cement Clinkers under Chapter 25 of the Central Excise Tariff Act, 1985. The key issue in this case revolved around whether the Appellants, upon opting for the SSI exemption on 01.04.2007, were obligated to reverse the CENVAT Credit on the stock of semi-finished goods (clinkers) and processed material present in their factory as of 31.03.2007. The demand for duty, interest, and penalty amounted to Rs. 1,23,477.00. The Appellant's representative argued that there was no CENVAT Credit available in their account on the specified date, thus contending that they were not required to reverse the credit on the existing stock of semi-finished goods and purchased items. The Tribunal referenced a decision from the Hon'ble Punjab & Haryana High Court in the case of CCE Chandigarh Vs. M/s C.N.C. Commercial Ltd, where a similar issue under Notification No.08/2001-CE was addressed. The Court dismissed the appeal, emphasizing that the credit of duty paid on inputs need not be reversed based on a one-to-one relationship between inputs and final products. This decision was supported by the judgment in the Dai Ichi Karkaria case. Additionally, the Tribunal highlighted a comparable stance taken by the Hon'ble Andhra Pradesh High Court in the case of Commissioner of C.Ex., Tirupati Vs Suvera Processed Foods Pvt.Ltd. and a ruling by the Larger Bench of the Tribunal in the case of H.M.T. Vs Commissioner of Central Excise, Panchkula. Consequently, based on the precedents and legal interpretations discussed, the Tribunal concluded that the impugned order could not be upheld. Therefore, the appeal filed by the Appellant was allowed, and the previous decision was set aside. The judgment was dictated and pronounced in court by the presiding Judge.
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