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2016 (8) TMI 201 - AT - Central ExciseCenvat Credit - 100% EOU - Reversal of cenvat credit availed on inputs removed from the factory as such against CT-3 certificate Rule 3(4) of the erstwhile Cenvat Credit Rules 2002 - Held that - The Hon ble High court of Karnataka in the case of CCE Bangalore Vs. Solectron Centum Electronics Ltd. 2014 (10) TMI 596 - KARNATAKA HIGH COURT has observed that there was no duty payable as the said inputs were removed with the previous permission of the department as reflected in CT-3 - inputs can be considered as excisable goods and clearance of the same can be placed on par with clearance of excisable goods. - Contention of the Revenue devoid of merits - decided in favor of assessee.
Issues:
Claiming Cenvat Credit on duty paid inputs cleared against CT-3 certificate issued to 100% EOU. Analysis: The appellants, engaged in manufacturing fiber reinforced products, claimed Cenvat Credit on inputs cleared against CT-3 certificate issued to an EOU. Dispute arose regarding the liability to reverse Cenvat Credit availed on such inputs. Lower authorities invoked Rule 3(4) of Cenvat Credit Rules, 2002, demanding reversal of credit amounting to ?15,440. Appellants argued that duty was debited in bond at clearance, treating it as export, citing Tribunal decisions and Circular No. 283/117/96-CX. The Tribunal noted that CT-3 certificates were issued to EOUs under a specific notification allowing duty-free procurement from other manufacturers. Revenue contended that goods were not procured directly from input manufacturer, thus EOU wasn't eligible for the notification benefit. Citing High Court and Tribunal precedents, it was held that if inputs were removed with department permission under CT-3, duty reversal was justified, entitling refund. The Tribunal emphasized that appellants had a strong case, as the situation was revenue neutral, and extended period for demand couldn't be invoked. The Commissioner's failure to discuss limitation issue rendered the demand unsustainable, leading to the appeal's rejection. In conclusion, the Tribunal found no reason to uphold the impugned order, setting it aside and allowing the appeal with consequential relief for the appellant.
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