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TMI Blog2012 (7) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs lying in stock as on 01/03/2007 or received after 01/03/2007 requires corroboration through documentary evidences. Therefore, the appellant has to lead evidence in respect of the supplies of inputs as such to 100% EOU, duty involved thereon and the reversal of credit made in the RG-23 register, so that their claim of reversal of credit is substantiated - matter remanded to adjudicating authority for reconsideration - E/142/11 - - - Dated:- 3-1-2012 - Mr. Ashok Jindal, Mr. P.R. Chandrasekharan, JJ. Shri.Bharat Raichandani, Advocate for appellant Shri.Y.K.Agarwal, Addl. Comm. (AR), for respondent Per: P.R. Chandrasekharan 1. This appeal and stay application are directed against the order-in-original No.18/CEX/10 dated 07/10/2010 passed by the Commissioner of Central Excise, Pune-III Commissionerate. 2. The facts arising for consideration of this case are as follows:- 2.1 The appellant, M/s.L.G. Electronics Pvt Ltd., (LG in short), are manufacturers of Colour TVs, refrigerators, cellular phones, washing machines, DVD Drive/DVD Writers parts thereof falling under Chapter No.84 85 of the Schedule to the Central Excise Tariff Act, 1985. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner held that the appellant has not produced sufficient evidence to support their contention along with necessary documentation and, accordingly, he confirmed the demand for Rs.1,94,12,316/- under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 along with interest thereon under Section 11AB of the Act. He also imposed an equivalent amount of penalty under Section 11AC. Hence, the appellants are in appeal before us. 3. The Ld. Counsel for the appellant made following submissions:- 3.1 The demand of credit of Rs.1,41,51,521/- availed on inputs lying in stock as on 01/03/2007 and inputs contained in finished goods lying in stock as on 01/03/2007 is not sustainable, since the Rule 11 (3) of the Cenvat Credit Rules, 2004 is not applicable to a situation when the exempted final products are exported under bond. The Ld. Counsel submits that the provisions of Rule 11 (3) of the Cenvat Credit Rules applies only in respect of balance amount remaining in Cenvat credit account of the appellants after reversal of inputs lying in stock or inputs contained in lying in stock as on the date when the final product became unconditionally exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred to EOU unit as such on reversal of duty under Rule 3 (5) of Cenvat Credit Rules, and hence, the amount of Rs.32,94,456/- stands reversed. 3.3 They have also placed reliance on the judgement of the hon ble High Court of Bombay in the case of Repro India Ltd., Vs. UOI, reported in 2008 (88) RLT 481, in support of their contention that the credit availed on inputs used in the manufacture of exempted goods exported under bond is not required to be reversed. 3.4 It has been further argued that demand of credit of Rs.52,60,795/- availed on inputs received in the factory premises of the appellants after 01/03/2007 is not sustainable as the said amount has been reversed by the appellants at the time of removal of said inputs from their DTA unit to EOU unit and the EOU unit has availed the credit of Rs.52,60,795/- . Thus, the situation is entirely neutral and, therefore, the question of demanding amount of Rs.52,60,795/- once again from the DTA unit is not sustainable. 3.5 They have also argued all the material facts were within the knowledge of the department and therefore, the extended period of limitation is not invocable in the present case. It is also argued that no pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bond in terms of Central Excise Rules, 2002. Considering the language of Rule 6 (6) (v) of the Cenvat Credit Rules, 2004, the petitioners are entitled to avail Cenvat Credit in respect of the inputs used in the manufacture of final products being exported irrespective of the fact that the final products are otherwise exempt 5.3 The hon ble High Court of Himachal Pradesh at Shimla in the case of CCE Vs. Drish Shoes Ltd., reported in 2010 (254) ELT 417 (HP) also held a similar view. 16. The scheme of Cenvat Credit Rules 2002, as also 2004, reference to the relevant provisions of which has been made herein above shows that the Cenvat Credit/refund is allowed on the inputs of all manufactured goods which are not exempt from duty, as is clear from a combined reading of Rule 3 and sub-rule (1) of Rule 6 of the Cenvat Credit Rules, 2002 as also the Rules of 2004, so as to avoid indirect double taxation on inputs. However, this Rule is not absolute. It is subject to exception clause, contained in Rule 6 (5) of the Rules, 2002 and 6 (6) of Rules, 2004 and one of the exceptions is in respect of excisable goods, which are cleared for export under bond in terms of the provisions of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 requires corroboration through documentary evidences. Therefore, the appellant has to lead evidence in respect of the supplies of inputs as such to 100% EOU, duty involved thereon and the reversal of credit made in the RG-23 register, so that their claim of reversal of credit for the amount of Rs.52,60,795/- is substantiated. 8. In view of the foregoing discussion, we are of the view that the matter has to go back to the adjudicating authority for reconsideration in the light of the judicial pronouncements made above and the appellants are directed to lead evidence in support of their claim that they have used the inputs (on which credit has been taken) in the manufacture of goods, which has been exported under bond and also they have reversed the credit in respect of the inputs removed as such. The Ld. Adjudicating authority shall consider the evidences submitted by the appellant and thereafter, decide the matter afresh. Needless to say that the appellant should be given a reasonable opportunity for making submissions in their defence. 9. Thus, the appeal is allowed by way of remand. Stay application is also disposed of on the above terms. (Pronounced in Court on ..) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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