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TMI Blog2013 (9) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the condition of non-availament of Cenvat credit by the assessee was done away with. Cumulative reading of the above referred two notifications clearly indicate that w.e.f. 1-3-2003 the exemption from excise duty on its final product available to the appellant prior to 1-3-2003 was partially withdrawn to the extent of 4% ad valorem by increasing the excise duty from 4% to 8%. Thus, in our view to that extent the final product of the appellant cease to be exempted from excise duty. Even as per Rule 3(1) of the Cenvat Credit Rules, 2002 the appellant is entitled to Cenvat credit on the inputs in question which were either available in stock or in process or were contained in the final product lying in stock as on 1-3-2003. Thus, viewing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant availed Cenvat credit in respect of the inputs, semi-processed inputs and inputs contained in the final products lying in the stock as on 1-3-2003. 5. Department was of the view that the appellant was not entitled to avail Cenvat credit on the unused stock as per Rule 3(2) of Cenvat Credit Rules, 2002 which stipulates that manufacturer or producer of the final product shall be allowed Cenvat credit of duty paid on inputs lying in stock or in process or contained in the final product on the date on which any goods manufactured by the said manufacturer or producer cease to be exempted goods or become excisable goods. Accordingly, show cause notices proposing to disallow Cenvat credit availed and recover the same raising Cenvat credit de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 3(1) of the erstwhile Cenvat Credit Rules, 2002. Ld. Counsel further contended that even as per Rule 3(2), the appellant is entitled to Cenvat credit in respect of duty paid inputs available in the stock or in process or inputs contained in the final product lying in stock as on 1-3-2003. 9. Shri R.K. Verma, ld. AR, for Revenue on the contrary has argued in support of the impugned order. He has contended that ld. Counsel has rightly disallowed the Cenvat credit to the appellant in view of Rule 3(2) of Cenvat Credit Rules, 2002 because the inputs lying in stock or in process or contained in the final product lying in stock as on 1-3-2003 did not relate to the goods which ceased to be exempted or non-excisable goods. Thus he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the corresponding entry in column (2) of the said Table (hereinafter referred to as the said goods), from so much of the duty of excise leviable thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table, subject to the following conditions, namely :- (i) no credit of the duty paid on - (a) inputs; or (b) capital goods exclusively, Used in the manufacture of these goods has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002; and (ii) the duty is paid in cash or through account current. Explanation I. - For the removal of doubts, it is clarified that a manufacturer who has availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid exemption was made available to the assessee subject to the condition that he would not get credit of the duty paid on inputs. 13. We find that vide Notification No. 10/2003-C.E., dated 1-3-2003 the above referred exemption in the form of reduction in excise duty to the extent of 4% was partially taken away by increasing the rate of the excise duty payable from 4% to 8% ad valorem and the condition of non-availament of Cenvat credit by the assessee was done away with. Cumulative reading of the above referred two notifications clearly indicate that w.e.f. 1-3-2003 the exemption from excise duty on its final product available to the appellant prior to 1-3-2003 was partially withdrawn to the extent of 4% ad valorem by increasing the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs in question which were either available in stock or in process or were contained in the final product lying in stock as on 1-3-2003. Thus, viewing the problem from any angle the appellant is entitled to claim Cenvat credit under Rule 3 of the Cenvat Credit Rules, 2002. 15. In view of the above discussion, we accept the appeals and set aside the impugned order of the Commissioner (Appeals) denying Cenvat credit of the inputs lying in stock or in process or in inputs contained in the final products lying in stock as on 1-3-2003. 16. On perusal of the impugned order we find that the appellant has been denied Cenvat credit on duty paid inputs on the ground that his case is not covered by Rule 3(2) of erstwhile Cenvat Credit Rules, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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