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TMI Blog2019 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... iming Exemption from duty - unutilized cenvat credit - credit is related to input service credit and capital goods. From the plain reading of Rule 11(3), it is clear that the provision of reversal of the credit is provided only in respect of inputs and not on input service and capital goods. The provision for lapsing of credit provided in Clause (ii) of Rule 11(3), the principle of ejusdem generis shall apply, accordingly, credit related to capital goods and input services shall not lapse, therefore, the unutilized cenvat credit lying in balance related to capital goods and input service cannot be demanded. Time limitation - Held that:- In respect of the unutilized cenvat credit, the appellant filed refund claim and the same was sanctioned by the sanctioning authority after remand by the Commissioner (Appeals), therefore, there is no suppression of fact on part of the appellant - the demand for an amount lying as on 31.03.2008, an SCN should have been issued within 1 year whereas the SCN was issued on 06.05.2009 which is clearly beyond the normal period of one year, hence the same is time bar. Appeal allowed - decided in favor of appellant. - Appeal No. E/21/2012-DB - A/1003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e audit party of Central Excise undertook the Central Excise audit of the appellant on 10.02.2009 and 11.02.2009 wherein they raised objection regarding non eligibility of cenvat credit lying unutilized and carried forward for the financial year 2008-09. The audit observation was culminated into issuance of final audit report whereby the department sought reversal of credit, accordingly, a SCN dated 06.05.2009 was issued proposing reversal of credit, demanding interest and penalty. The adjudicating authority vide order dated 28.09.2011 confirmed the demand of cenvat credit of ₹ 9,27,04,651/- under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act along with interest and also imposed equal amount of penalty. The authority also confirmed reversal of credit on capital goods and input services. Being aggrieved by the order in original dated 28.09.2011, the appellant filed the present appeal. 2. Sh. V.S. Nankani Ld. Senior advocate and Sh. Amit Laddha Ld. Advocate appeared on behalf of the appellant. Sh. V.S. Nankani submits that out of total demand of ₹ 9,27,04,651/-, an amount of ₹ 69,43,864/- is related to the cenvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 146 (Tri.Ahmd.) Circular No. 795/28/2004-CX. Dated 28.07.2004 Circular No. 845/3/2007-CX. Dated 01.02.2007 Cirlcuar No. 858/16/2007-CX dated 08.11.2007 3. He also submits that SCN has not alleged that the appellant carried forward cenvat credit with the intention to evade payment of duty, in absence of any suppression wilful misstatement with intention to evade the duty, the larger period of limitation would not have been invoked. He submits that the adjudicating authority gravely erred in imposing equal penalty on the appellant under Provision of Rule 15 of Cenvat Credit Rules, 2004 and Rule 25 of Central Excise Rule, 2002, as the appellant have not contravened the provision of Central Excise Act of the Cenvat Credit Rules, much less with intent to evade payment of duty. He placed reliance on the following judgments: HMM Ltd. 1995 (76) ELT 497 (SC) Balakrishna Industries 2006 (201) ELT 325 (SC) Hyva India P. Ltd 2008 (226) ELT 264 (Tri. Bang.) Godrej Soaps 2004 (174) ELT 25 (Tri.LB) 4. Sh. J. Nagori Ld. Additional Commissioner (AR) appearing on behalf the Revenue reiterates the findings of the impugned order. 5. We have carefully considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard this amount of ₹ 8,57,60,788/- which included in overall demand amount has been allowed by the department as refund. In the such case demand for this particular amount cannot be raised otherwise it will amount to review of refund sanction order. Moreover, Rule 6(6) of Cenvat Credit Rules, 2004 provides for allowing the cenvat credit in respect of inputs used in the goods exported. The said Rule is reproduced below: (6) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are either- I. cleared to a unit in a special economic zone; or to a developer of a special economic zone for their authorized operations ; or II. Cleared to a hundred per cent. export-oriented undertaking; or III. cleared to a unit in an Electronic Hardware Technology Park or Software Technology Park; or IV. supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) No.108/95-Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by invoking Rule 11 of Cenvat Credit Rules, 2004. It has been held in various judgments cited by the Ld. Counsel i.e. Drish Shoes Ltd and Repro India Ltd. (Supra), even though the export goods is non dutiable against the export cenvat credit on inputs used in such export goods is admissible and refund of the same is also admissible under Rule 5 of Cenvat Credit Rules, 2004. Therefore, the adjudicating authority ignoring all the provision of Rule 6(6), demanded cenvat credit lying in balance as on 01.04.2008 invoking Rule 11(3) in isolation which is absolutely illegal and incorrect. As regard unutilized cenvat credit as on 01.04.2008 amounting to ₹ 69,43,864/-, it is related to input service credit and capital goods. From the plain reading of Rule 11(3), it is clear that the provision of reversal of the credit is provided only in respect of inputs and not on input service and capital goods. The provision for lapsing of credit provided in Clause (ii) of Rule 11(3), the principle of ejusdem generis shall apply, accordingly, credit related to capital goods and input services shall not lapse, therefore, the unutilized cenvat credit lying in balance related to capital goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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