9911796707
TMI Blog2009 (3) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The relevant fact that arise for consideration are that while verifying the records of the appellant, it was found that during the course of manufacture of Gelatin Capsules using Gelatin I.P., Gelatin B.P (Spl. For export), Geltain Tablet grade, Gelatin Mass Waste is generated. Further it was noticed that the appellant had destroyed such Gelatin Mass Waste without reversing the credit availed on the input contained therein during the period August, 2001 to March, 2006. It appeared that in terms of provisions of sub-rule 4(b) of Rule 3 of Cenvat Credit Rules, 2004 or under the analogous provisions namely sub-rule (4) of Rule 3 of Cenvat Credit Rules, 2002 or sub-rule (1B) of Rule 57AB of the Central Excise Rules, 1944, as it existed during the material time, either the appellant is required to reverse the credit taken on inputs not used in or in relation to the manufacture of dutiable goods or no credit should have been taken on such supply of inputs, which are used for the manufacture of the exempted goods. Further, the appellant had filed the application for remission of duty vide their Letter No. BP/CEX/145/03-04 dated 27-2-2003 under Rule 21 of Central Excise Rules, 1944, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The CENVAT credit irregularly availed on the raw material which have gone into the said Gelatin Mass Waste amounting to Rs. 59,32,808/- (Rs. 58,16,478/- being the BED end Rs. 1,16,330/- Education Cess) should not be demanded and recovered under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of Central Excise Act, 1944. (ii) Interest on the amount of duty determined at (i) above, at such rates as is for the time being fixed by the Central Government, from the first date of the month, succeeding the month in which the duty ought to have been paid, till the date of payment of the said duty, should not be demanded from them under Section 11AB of the Central Excise Act, 1944. (iii) Penalty should not be imposed upon them under Rule 15 of Cenvat Credit Rules, 2004 and Section 11AC of Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 for the offence committed deliberately. The appellant contested the show cause notices on merits mainly on the ground that there is no need to reverse the Cenvat credit on the inputs, as remission is one thing and Cenvat credit is another thing and also that Rule 57AD straightaway covers the issue in favour of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is his submission that as held by the Larger Bench, there is no provision for reversal of Cenvat credit on the goods for which remission was granted. It is also the submission that by accepting the decision of the Larger Bench, the Central Government of India has amended the provisions of Central Excise Rules to incorporate this in the Rules itself, which has come into effect from 2007. It was also submitted by him that Gelatin Mass Waste manufactured by the appellant is not excisable. He would also submit that the Gelatin Mass Waste generated in the manufacturing process is not a final product and hence, reversal of Cenvat credit as sought by the department is totally unwarranted and that the provisions of Cenvat Credit Rules are not applicable in this case. It is also the submission that the present case is covered by the erstwhile Rule 57D of Central Excise Rules, 1944 and the clarification issued by the Board vide Circular F. No. B-4/7/2000-TRU, 3-4-2000. He would rely upon the decision of the Tribunal in the case of CCE, Pune-II v. GES Polymers Pvt Ltd. as reported in 2008 (225) E.L.T. 122 (Tri.-Mumbai). 4. The learned JCDR on the other hand would submit that the reasonings g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t credit availed on the goods need not be reversed or denied or varied on the ground that the part of inputs is contained in any waste, refuse, or by product arising during the manufacture of final product. In this case before us, it is undisputed that the appellants had put to use the duty paid inputs for the manufacturing process and the 'Gelatin Mass Waste' arose during the course of manufacture. It is to be mentioned here that subsequent to the enactment of new Cenvat Rule which were notified vide Notification No. 11/2000-C.E. (N.T.), dated 1-3-2000; there are no provisions which are para materia to Rule 57D. In the current Cenvat Credit Rules also there are no provisions like Rule 57D of Central Excise Rules, 1944 but we find that the Government of India vide C.B.E. & C. Circular No. B/4/7/2000-TRU, dated 3-4-2000 at the time of enacting new Cenvat Rules had given the following clarification. Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject: Cenvat Rules - Clarifications - Regarding. 1. As you are aware, Cenvat Rules were notified vide Notification No. 11/2000-C.E. (N.T.), dated 1st March, 2000 and they w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, the manufacturer shall be entitled to take Cenvat credit as and when the goods sent to the job worker are received back. If part of the goods are received back within 180 days and the rest of the goods are received back after 180 days, the obligation for debiting the credit shall arise only in respect of Cenvat credit attributable to that part which is not received within 180 days. 7. Provision has also been made for permitting the Cenvat credit when the inputs or capital goods are purchased from the first stage dealer or from the second stage dealer. These dealers should be registered under Rule 52AA of the Central Excise Rules. The other procedural requirements in respect of first stage dealer and second stage dealer will continue as in the case of Modvat rules. 8. In the case of capital goods, the Cenvat rules do not provide installation of capital goods as a pre-requisite for taking Cenvat credit. The credit can be taken as and when the capital goods are received in the factory. For such capital goods which were received prior to 1-4-2000 but not installed up to 1-4-2000 also, the Cenvat credit would also be admissible. It may, however, be noted that in respect of all ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
