2014 (6) TMI 23 - AT - Central Excise

Benefit of Notification No.30/2004-CE, dated 09.07.2004 - Unutilized CENVAT Credit - Held that - AED is exempted by Notification No.30/2004-CE and, the case relates to 2004, there is no scope to utilize such credit by the appellant. In view of that, the decision of eligibility to avail the unutilized credit lying in Cenvat credit account as on 31.12.2004 on merit at this stage, when AED is exempted and the appellant is unable to avail credit is mere academic one - Decided In favour of assessee.

Summary

Issues:
1. Applicability of Notification No.30/2004-CE regarding Cenvat credit reversal.
2. Interpretation of Rule 11(2) of Cenvat Credit Rules, 2004.
3. Utilization of unutilized Cenvat credit balance.
4. Impact of exemption on Additional Excise Duty (AED) on credit utilization.

Analysis:
1. The case involved the appellants engaged in manufacturing various textile products availing benefits under Notification No.30/2004-CE. The issue arose when the adjudicating authority expunged a Cenvat credit balance of Rs.11,55,740/- due to the proviso of the notification, which excludes goods where duty credit on inputs has been claimed under Cenvat Credit Rules, 2004.

2. The appellant's counsel argued that Rule 11(2) of the Cenvat Credit Rules, 2004 should be interpreted in the context of notifications based on the value or quantity of clearance in a financial year, like Small Scale Industries (SSI) exemption. The counsel contended that as the unutilized credit balance was from 2004-05 and still with the assessee, the matter should be closed without delving into the merits. Additionally, the denial of credit on Additional Excise Duty (AED) was exempted under Notification No.30/2004-CE, hindering its utilization.

3. The Revenue's representative cited a Supreme Court case where unutilized credit lapse was upheld. However, the Tribunal found that since AED was exempted by Notification No.30/2004-CE, and the case pertained to 2004, the appellant could not utilize the credit balance. Consequently, the Tribunal deemed the decision on the eligibility of unutilized credit as merely academic, leading to the dismissal of the appeal without a detailed examination of the merits. The Tribunal left all issues open for future determination in suitable cases.

This comprehensive analysis highlights the key legal aspects and arguments presented in the judgment, addressing the issues related to the applicability of notifications, interpretation of rules, credit utilization, and the impact of exemptions on credit availability.