9911796707
TMI Blog2015 (8) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... the discussion on the said Rule is irrelevant in the facts of the present case. In the present case, the appellant has switched over to Rule 6(2) w.e.f. 1.9.2004 and reversed actual credit on its stores, work in progress and finished products as on 31.8.2004 and thus submissions by both sides are irrelevant to the facts of the present case. - Decided in favour of assessee. - APPEAL No. E/87792/14-Mum - Final Order No. A/2213/2015-WZB/EB - Dated:- 16-7-2015 - Mr. P.K. Jain, Member (Technical) and Mr. S.S. Garg, Member (Judicial), JJ. For the Petitioner : Shri M.H. Patil, Advocate, and Shri Ravi L. Ramanan, Sr. General Manager-Excise For the Respondent :Shri Hitesh Shah, Commissioner (AR) ORDER Per: P.K. Jain Brief facts of the case are that the appellant is engaged in the manufacture of tractors and parts thereof. They were clearing such goods on payment of duty and also availing cenvat credit for the inputs used in the manufacture of such goods. Vide Notification No.23/2004-CE dated 9.7.2004, tractors falling under Chapter Heading 8701 became exempt from payment of central excise duty. Thus from 9.7.2004 onwards they were not required to pay central ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in finished goods as on 31.8.2004. Thereafter on 24.9.2004 they computed the total amount of cenvat credit availed by them on various inputs lying in stores, work in progress as also used in the finished goods which were available as on 31.8.2004 and reversed the credit (approximately ₹ 4.98 crores) by partly paying from the credit available and partly paying by cash. 3. Revenue issued a show cause notice dated 6.10.2005 demanding an amount equal to 8/10% of the total price, (excluding sales tax and other taxes) of the exempted final product charged by the manufacturer for sale of such goods at the time of their clearance from their factory under Rule 6(3)(b) of the Cenvat Credit Rules, 2004. The amount was proposed to be recovered under Rule 12 of the erstwhile Cenvat Credit Rules, 2002 read with Section 38A of the Central Excise Act, 1944 and under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944. In addition, interest under Section 11AB and penalty under Rule 13 of the erstwhile Cenvat Credit Rules, 2002 read with Section 38A of the Central Excise Act, 1944 and Rule 15 of the Cenvat Credit Rules, 2004 was also proposed. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2004 in any case and cannot be on the final products cleared between 1.9.2004 to 24.9.2004. It was further submitted that Section 72 of the Finance Act, 2010 amended Rule 6 of the Cenvat Credit Rules, 2002 by inserting sub-rule (b) of Rule 6 permitting manufacturer to reverse the proportional credit if such inputs are used in relation to credit of exempted final products. It was further submitted that this amendment was made retrospectively for the period 1.3.2002 to 9.7.2004. Similar provisions was made under Section 73 of the Finance Act for the Cenvat Credit Rules, 2004 for the period 10.9.2004 to 31.3.2008. It was submitted that these provisions have been given retrospective effect. The fact that they have reversed the credit in 2004 itself, they have satisfied the condition of the said Rules and therefore no further demand is sustainable. It was also submitted that the Commissioner has confirmed the demand of ₹ 7,05,16,944/- without deducting the amount of ₹ 4,98,83,659/- paid by them. It was also submitted that the tractors became chargeable to nil duty w.e.f. 9.7.2004 and in view of various decisions of various courts, the credit of inputs taken before 9.7.2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Ashok Iron Steel Fabricators reported in 2002 (140) ELT 277 (Tri.-LB), wherein the Tribunal has held that the credit availed and utilized during the period when final product dutiable credit not to be reversed when subsequently final product exempted from duty. 5. The learned Commissioner (AR) reiterated the points mentioned in the impugned order. He submitted that the appellant has not reversed the cenvat credit till 24.9.2004 and therefore it cannot be said that they have opted for maintaining separate records. He further emphasized that a perusal of the impugned order indicate that even after 1.9.2004, the appellant was taking the credit of inputs relating to hydraulic system. After assembling such hydraulic system which are chargeable to duty, sometimes they are clearing on payment of duty and in some cases when they are using such hydraulics for manufacture of exempted tractors, they are reversing the credit of inputs used in such hydraulics. Thus in view of this factual position, it cannot be said that even after 1.9.2004 they were not availing the credit of inputs used in the manufacture of tractors exempt from payment of duty. He further submitted that the Hon ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the quantity of inputs meant for use in the manufacture of exempted goods and take CENVAT credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. (3) The manufacturer, opting not to maintain separate accounts shall follow either of the following conditions, as applicable to him, namely:- (a) if the exempted goods are- i. goods falling within heading No. 22.04 of the First Schedule to the Tariff Act: ii. Low Sulphur Heavy Stock (LSHS) falling within Chapter 27 of the said First Schedule used in the generation of electricity; iii. Naphtha (RN) falling within Chapter 27 of the said First Schedule used in the manufacture of fertilizer; iv. tyres of a kind used on animal drawn vehicles or handcarts and their tubes, falling within Chapter 40 of the said First Schedule; v. newsprint, in rolls or sheets, falling within heading No.48.01 of the said First Schedule; vi. final products falling within Chapters 50 to 63 of the said First Schedule. vii. goods supplied to defence personnel or for defence projects or to the Ministry of Defence the manufacturer shall pay an amount equivalent to the CENV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in hydraulic system if used in exempt tractors. Even in respect of the inputs on which they have taken the credit earlier, the same was reversed if the said input was in stores, work-in-progress or final product available with them. Thus, effectively no credit was taken on the inputs used in the goods cleared from 1.9.2004 without payment of duty. We find the only objection of the Revenue is about delay in reversal of the cenvat credit. We find that the learned counsel for the appellant has submitted a judgment of the Hon ble Supreme Court in the case of Sonalac Paints and Coatings Ltd. (supra) wherein almost similar situation had arisen. In that case, the unit was a SSI unit. As a SSI unit they were to clear goods without payment of duty beginning 1.4.2000. As per the requirements of the law, they were required to reverse the credit of duty on inputs in their stores, work in progress and the final product on 31.3.2000. M/s. Sonalac Paints and Coatings Ltd. in that case computed the same but reversed on 3.10.2000 and in these circumstances the Hon ble Supreme Court has upheld the order of the Commissioner, i.e. reversal of credit at a later date will not disentitle the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
