2017 (3) TMI 1125 - AT - Central Excise

CENVAT credit - legality of credit availed on crossing of exemption limit - whether the appellant as on the date after exceeding the total exemption limit of 150 lakhs under SSI Exemption N/N. 8/2003-CE dated 01.03.2008 correctly availed CENVAT credit on the inputs lying in stock in accordance with the provisions of Rule 3(2) of CCR 2004? - Held that - No contrary evidence has been placed by the Revenue to show that these inputs were not in stock as on 03.12.2009 - in the absence of any contrary evidence led down by the department in support the allegation that the inputs on which credit taken by the appellant as on 03.12.2009 were not available in stock the claim of the appellant supported by evidence carries weight and acceptable - credit allowed - appeal allowed - decided in favor of assessee.

Summary

Issues:
- Availing CENVAT credit in contravention of Rule 3(2) of CCR, 2004
- Correctness of availing CENVAT credit on inputs after exceeding exemption limit

Analysis:

Issue 1: Availing CENVAT credit in contravention of Rule 3(2) of CCR, 2004
The appellant, engaged in manufacturing excisable goods, availed CENVAT credit after crossing the exemption limit of ?150 lakhs, leading to a demand notice for recovery of the credit along with interest and penalty. The appellant contended that the inputs for which credit was taken were in stock as on the date of availing the credit, supported by a Chartered Engineer's Certificate and other evidence. The Revenue, however, rejected the appellant's evidence without valid grounds. The Tribunal noted that the appellant had provided sufficient evidence of the availability of inputs in stock as on the date of availing the credit, while the Revenue failed to present contrary evidence. Consequently, the Tribunal found the appellant's claim to be acceptable and set aside the demand, allowing the appeal.

Issue 2: Correctness of availing CENVAT credit on inputs after exceeding exemption limit
The key question was whether the appellant correctly availed CENVAT credit on inputs in stock after surpassing the exemption limit. The appellant argued that the inputs were utilized in manufacturing dutiable products after crossing the exemption limit, justifying the credit availed. Supporting documents, including a Chartered Engineer's Certificate and relevant returns, were presented to substantiate the claim. The Tribunal examined the evidence provided, including a list of invoices related to the inputs in question. It was observed that the appellant's evidence, including the engineer's certificate, indicated the availability of inputs in stock as claimed. In the absence of contrary evidence from the Revenue, the Tribunal found the appellant's claim to be well-supported and upheld the appeal, setting aside the impugned order and granting consequential relief as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the appeal and providing relief based on the evidence presented regarding the correct availing of CENVAT credit on inputs after exceeding the exemption limit.