9911796707
TMI Blog2006 (2) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... ontent Declared Input Value Actual Value or Ex.Credit Excise (B.E.D) Credit Kgs. Rs. Kgs. Rs. Rs. Rs. 1. YARN (Avg. Yarn Cost- Rs. 128.94) 92718.500 11954860 92718.500 11954860 10400290 832023 2. FABRICS (5% Avg. Process loss) 540039.690 87364645 568462.800 73297593 63766221 5101298 3. FINISHED GOODS 717214 (Unit) 166169467 721691.496 93054902* 80954356 6476348 4. SEMI- FINISHED GOODS 146967.6 (Unit) 23182720 125856.243 16227904 14117682 1129415 5. STOCK IN TRANSIT (a) FABRICS (5% Avg. Process loss) 17959.970 5417443 18905.200 2437636 2120654 169652 (b) FINISHED GOODS 652 (Unit) 329740 1790.119 230818 200803 160064 GRAND TOTAL 294418875 1529424.358 197203713 1715560007 13724801 Later, from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued on 8-7-04. It was under Rule 12 of the Cenvat Credit Rules, 2002, in terms of which, provisions of Section 11A were mutatis mutandis applicable to recovery of Cenvat credit wrongly taken/utilized. The relevant date for the purpose of computing the period of limitation required to be determined in terms of Section 11A(3)(ii)(a)(B) inasmuch as the appellants had not filed periodical Cenvat credit returns. Ld. counsel pointed out that such return for the month of April, 2003 should have been filed on or before 10-5-03 in terms of Rule 7(5) of the Cenvat Credit Rules, 2002. Hence 10-5-03 was the relevant date determined in terms of Section 11A(3)(ii)(a)(B). The SCN was issued beyond one year from this date. Hence the plea of limitation. 4. Ld. SDR, contesting this plea of limitation, submitted that, in the facts of this case, the relevant date, for the purpose of recovery of credit under Rule 12 of the CENVAT Credit Rules, 2002, could only be determined in terms of Section 11A(3)(ii)(a)(A) inasmuch the appellants had actually filed Cenvat credit returns. These returns (for the months of April, May and June, 2003) were filed on 17-7-03 along with quarterly return in ER-1 F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ysically present in such fabrics lying in stock as on 31-3-03 was cenvatable under the rule. The rule under consideration reads as under : Rule 9A. Transitional provisions for Textiles and Textile Articles. - (1) A manufacturer, producer, first stage dealer or second stage dealer of goods falling under Chapters 50 to 63 of the First Schedule to the Tariff Act shall be entitled to avail credit equal to the duty paid on inputs of such finished product, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of inputs (whether lying in stock or in process or contained in finished products lying in stock) and subject to availability of the document evidencing actual payment of duty thereon. There is no dispute with regard to inputs lying as such in stock as on 31-3-03. The same is the position with regard to the inputs contained in the finished goods lying in stock as on the said date. The controversy is in respect of in-process materials viz. fabrics lying in stock as on the said date. The assessee s argument is that not only the actual phys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct or not. The appellants commenced such activity only on 1-4-03. The above argument of ld. counsel cannot be applied to the stock of inputs, in-process inputs and semi-finished/finished goods present in their factory on 31-3-03. In respect of these materials, the transitional provisions of Rule 9A would strictly apply and, accordingly, Cenvat credit would be available to only those inputs physically present in stock, whether as such or as contained in fabric or as contained in semi-finished/finished goods. 8. For the reasons stated above, I hold that the appellants were not entitled to claim Cenvat credit under Rule 9A in respect of any input which was not present in stock as such or as contained in fabrics or as contained in semi-finished/finished goods as on 31-3-03. 9. Ld. Counsel has pointed out, with reference to the declaration dated 23-5-2003 filed by the assessee under sub-rule (4) of Rule 9A, that they had not claimed or availed Cenvat credit, in relation to semi-finished and finished goods, on any quantity of input in excess of what was physically contained in such semi-finished/finished goods present in stock as on 31-3-03. It was only in respect of fabrics in sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of Clause (c) of the proviso to Rule 12 of the Central Excise Rules, 2002. Again, it is an admitted fact that, along with the said quarterly return, they also filed Cenvat returns for the three months, April to June, 2003. But under Rule 7(5) of the Cenvat Credit Rules, 2002, such return for any calendar month should have been submitted within 10 days from the close of such month. Thus, in respect of April, 2003, the Cenvat return should have been filed on or before 10-5-2003. Similarly, the returns for May June, 03 should have been filed on or before 10-6-03 10-7-03 respectively. As against this procedural requirement, the assessee chose to file Cenvat returns for April, May and June, 03 on 17-7-03 only. It appears from the records that the returns were accepted by the department. The delay of filing these returns stood impliedly condoned. In the circumstances, the date on which the Cenvat return for April, 2003 was filed (17-7-2003) should be adopted as the relevant date in terms of Clause (A) above as applied, mutatis mutandis, to the procedure of recovery of Cenvat credit. When reckoned from this date, the SCN dated 8-7-04 is found to have been issued within one y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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