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2015 (11) TMI 1336 - AT - Central ExciseReversal of CENVAT Credit - Notification No.30/2004-CE, dt.09.07.2004 - Held that - Appellant opted for the benefit of Notification No.30/2004-CE on 01.08.2005. They reversed the credit on the inputs lying in stock, and also cleared the finished goods in stock on payment of duty. Therefore, they had met with the conditions of notification on the date of opting for the benefit of notification. They did not take any fresh credit on the inputs received subsequent to the said date. These facts are not disputed. The bone of contention is regarding the excess credit the appellant had in their account on 01.08.2005. There were no instructions or legal requirement to expunge (lapse) the said excess credit on 01.08.2005. However, by introduction of sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004 on 01.03.2007, such provisions to lapse , such excess credit was introduced. - Appellants have fulfilled the conditions of the notification and therefore, they are eligible for the benefit of the said notification. Any violation of sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004 should invite necessary action under Rule 14 & 15 of CENVAT Credit Rules 2004 only and cannot be extended to the extent of denying the benefit of the substantial notification for that mere reason. We therefore, do not find force in the findings of the Adjudicating authority in this respect in the impugned order. The same cannot be sustained. - Impugned order is set aside - Decided in favour of assessee.
Issues:
Appeal against Order-in-Original regarding duty exemption under Notification No.30/2004-CE for finished goods clearances during specific periods. Detailed Analysis: 1. Facts and Background: The appeals were filed by M/s Sunflag Filaments Industries and its employees against a common Order-in-Original issued by the Commissioner, Central Excise & Service Tax, Vapi. The issue revolved around the duty free clearance of finished products under Notification No.30/2004-CE from April 2006 to January 2012. 2. Contention of the Revenue: The Revenue contended that the Appellant failed to lapse excess CENVAT Credit in their account when sub-rule (3) of Rule 11 of the CENVAT Credit Rules 2004 was introduced. The Adjudicating authority denied duty exemption under the notification due to the Appellant's utilization of excess credit for payment of duty on capital goods. 3. Appellant's Arguments: The Appellant argued that the provisions of sub-rule (3) of Rule 11 are separate and not part of Notification No.30/2004-CE. They claimed to have fulfilled all conditions of the notification and that the rule introduced in 2007 should not apply retroactively to their case. 4. Judgment and Analysis: Upon careful consideration, the Tribunal found that the Appellant met the conditions of the notification when opting for it in 2005. The bone of contention was the excess credit in their account on that date. The Tribunal agreed that the Appellant should have lapsed the credit when the rule was introduced in 2007. However, this lapse did not amount to taking fresh credit, and the Appellant remained eligible for the notification benefit. 5. Decision and Conclusion: The Tribunal set aside the impugned order, ruling in favor of the Appellant. It was concluded that any contravention of Rule 11 should be addressed under Rule 14 & 15 of the CENVAT Credit Rules 2004, without denying the benefit of the notification. Consequently, the penalties imposed on the employees were also revoked, and all appeals were allowed. In summary, the judgment favored the Appellant, emphasizing that fulfilling the conditions of the notification at the time of opting for it was crucial, and any subsequent contraventions should be addressed under relevant rules without affecting the benefit of the notification itself.
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