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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2017 (6) TMI AT This

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2017 (6) TMI 854 - AT - Central Excise


Issues:
Violation of Rule 11(2) of CENVAT Credit Rules - Availing and utilization of CENVAT credit after opting for SSI exemption.

Analysis:
The appeal was filed against the Commissioner (A)'s order rejecting the appellant's appeal and upholding the Order-in-Original. The appellants were involved in the manufacture of toughened glass, insulated glass, and laminated glass falling under specific Chapter Headings of the Central Excise Tariff Act. They were eligible for SSI exemption during the financial years 2005-06 and 2006-07 but availed CENVAT credit in violation of the conditions prescribed under Rule 11(2) of the CENVAT Credit Rules, 2004. A show-cause notice was issued, leading to the confirmation of demand and imposition of penalty by the original authority. The appellant then appealed to the Commissioner (A), who rejected the appeal, leading to the present appeal.

The appellant argued that the impugned order was not sustainable in law. They contended that there was no time limit specified for availing CENVAT credit, and it was a vested right of the assessee. The appellant claimed that Rule 11(2) of CCR, 2004 did not apply to them as they were initially availing SSI exemption and then entering the dutiable sector. They further argued that the proceedings were initiated based on the assumption that they availed credit in 2005-06, which was not the case. The appellant rectified the lapse by paying the demanded amount with interest up to a certain date.

The learned AR supported the findings of the impugned order, leading to a detailed analysis by the Commissioner (A). The Commissioner (A) concluded that the appellant had indeed violated Rule 11(2) of the CENVAT Credit Rules. The specific paragraph from the impugned order was reproduced, emphasizing the application of the rule and the appellant's actions. The Commissioner (A) highlighted that the appellant, after crossing the SSI exemption limit in 2005-06, cleared goods on duty payment without availing CENVAT credit on inputs. Subsequently, in 2006-07, they opted for SSI exemption again, making them ineligible to utilize the remaining credit balance. Therefore, the CENVAT credit availed and utilized by the appellant in 2007-08 was deemed not in compliance with the law, leading to the demand for repayment and imposition of interest and penalty, which were upheld in the impugned order.

In conclusion, the Tribunal found no infirmity in the impugned order and upheld it by dismissing the appellant's appeal. The detailed analysis of the Rule 11(2) violation and the appellant's actions supported the decision, emphasizing the importance of compliance with the CENVAT Credit Rules.

 

 

 

 

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