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TMI Blog2016 (5) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... d registered with the Central Excise Department in August 2005 for manufacturing of Excisable goods. They had applied to the Development Commissioner, Kandla for conversion of the DTA unit into an 100% EOU, accordingly, necessary permission was accorded to them in November, 2005. Later, they approached the Dy. Commissioner of C.Ex., Vapi for necessary licence under the Customs Act, 1962, which was granted to them. 2.1 The Appellant was later issued with a Show Cause Notice on 25.05.2007 for recovery of CENVAT Credit amounting to Rs. 66,43,536/- alleging irregular transfer of said credit from their existing DTA unit on conversion into 100% EOU. On adjudication, the said demand was confirmed, penalty of Rs. 7.00 lakh was imposed and recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the specific amendment to Rule 17 of Central Excise Rules, 2002, the Circular No.77/99-Cus, dt.18.11.1999 has become redundant and the learned Commissioner has erred in following the said circular while denying CENVAT Credit to them. He submits that there is no prohibition in availing CENVAT Credit by an 100% EOU on conversion of a DTA to 100% EOU under the CENVAT Credit Rules. 5. Per contra, Shri Sameer Chitkara, learned Authorised Representative appearing for the Revenue has submitted that in view of the EXIM Policy, the Appellants are not entitled to the benefit of "duty and taxes" as on the date of conversion of a DTA unit to an 100% EOU. It is his contention that since an 100% EOU is governed by EXIM Policy, therefore, the CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -44 made various rules including Rule 57A to Rule 57U of CER-44 inapplicable to an EOU. CER-44 have been rescinded. There is also no corresponding rule/provision in CCR-01 or CCR-02. CER-01 and CER-02 contain transitional provisions to the effect that any circulars, instructions, orders, trading notices or other orders issued under the CER-44 superseded by CER-01, or such orders etc issued under CER-01 superseded by CER-02, by the Board, and in force on the date the erstwhile rules were rescinded shall, to the extent they are relevant and consistent with the new set of rules shall be deemed to be valid. CBEC Circular No. 77/99-Cus., dated 18-11-99 is reproduced below :- "Paragraph 9.28 of the EXIM Policy, 1997-2002 provides that existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for payment of duty on excisable goods removed to the DTA or for payment of duty on goods exported under claim for rebate. Also there exists no bar for a DTA unit carrying over inputs and the cenvat credit balance in its accounts when it got converted into an EOU. We also observe that this Tribunal in Waterbase Ltd. v. CCE, Guntur reported in 2005 (187) E.L.T. 346 (Tri. - Bang.) had made the following observations. "6. We have gone through the rival contentions. The appellants have informed their intention of taking Cenvat credit. The Department acknowledged the intimation sent by the appellants. In these circumstances, the appellants started taking credit. Therefore, there is no contumacious conduct on the part of the appellants warran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows :- "A manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. Here, the credit has been validly taken and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself choose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merger or amalgamation or lease. The claim of the appellant that the credit balance available related to inputs received on or after 6-9-04 is not contested. In any case, no provisions prohibited an EOU from availing balance of credit when the unit converted to EOU from DTA. EOU also manufactured goods for DTA clearances. Therefore GTNs claim in this regard is correct. As regards the second issue, the Commissioner (A) ordered that the appellant was required to reverse the credit originally availed when the inputs were removed as such. We find the order to be in accordance with Rule 3(5) of CCR, 04. The appellant had reversed credit as per the said rule and the demand in this regard was dropped by the original authority in the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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