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TMI Blog2024 (12) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Rules, 2001, the cenvat credit taken on the returned goods (finished goods) is equivalent to taking credit on the inputs as the returned goods are deemed to be inputs. Therefore, the Commissioner (Appeals) was right in demanding the cenvat credit lying in stock as on 01.04.2005. The original authority had observed that the appellant had cleared 45 stabilizers valued at Rs.11,80,134/- were cleared by them on payment of duty of Rs.1,88,821/- and Education Cess of Rs.3,776/- after crossing the SSI exemption limit in the year 2005-2006, which is also claimed by the appellant in their grounds of appeal. These goods were lying in stock at the time of opting for exemption under the SSI Notification. Hence, this is of no relevance because, the credit lying in stock on the returned goods had to be reversed in terms of the SSI Notification read with Rule 11 of the Cenvat Credit Rules, 2004. The impugned order confirming the demand of cenvat credit of Rs.3,47,656/- and Education Cess of Rs.6,953/- under Section 11A of the Central Excise Act, 1944 along with interest is upheld - Appeal dismissed. - MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) None for the Appellant. Mr. Neeraj Kumar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itten submissions. It is submitted that the appellant had cleared stabilizers manufactured by him on payment of duty, out of which 100 stabilizers were found to be defective and were returned and received back at the appellant s factory on 30.11.2004 for reconditioning, out of which 8 stabilizers were cleared on payment of duty in the same financial year 2004-05. With effect from 01.04.2005, the appellant was eligible for exemption under Notification No.8/2003 dated 01.03.2003. He stated that 47 stabilizers out of 100 stabilizers were cleared by availing exemption and the balance 45 stabilizers were thereafter cleared on payment of duty after the one crore limit was crossed. Therefore, the dispute is only with regard to 47 stabilizers cleared by availing full exemption under Notification No.8/2003 dated 01.03.2003. The contention of the department is that the amount equal to the cenvat credit taken at the time of return of these 47 stabilizers should be reversed; while the appellant s case is that once the stabilizers are returned and are manufactured, Rule 16(2) of the Central Excise Rules mandates clearance at the appropriate rate, which in this case was full exemption; hence, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turned on payment of duty. The remaining 92 stabilizers were lying in stock. These are undisputed facts. From 01.04.2005, the appellant opted for SSI exemption vide Notification No. 8/2003 dated 01.03.2003. The only dispute here is whether the cenvat credit lying in stock needs to be reversed as on 01.04.2005 when the appellant opted for SSI exemption. 6. Let s examine the relevant Rules and the SSI exemption Notification No.8/2003 dated 01.03.2003. Central Excise Rules, 2001 Rule 16. Credit of duty on goods returned to the factory.- (1) Where any goods on which duty has been paid at the time of removal thereof are subsequently returned to the factory for being remade, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such return in his records and shall be entitled to have CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2001 and utilise this credit according to the said rules. (2) If the process to which the goods are subjected before returning does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at the rate specified in the corresponding entry in column (3) of the said Table : Provided that nothing contained in this notification shall apply to a manufacturer who has availed the exemption under notification No. 39/2001-Central Excise, dated the 31st July, 2001, published in the Gazette of India vide number G.S.R. 565 (E), dated the 31st July, 2001, in the same financial year. Table S. No Value of clearances Rate of duty (1) (2) (3) 1. First clearances up to an aggregate value not exceeding one hundred lakh rupees made on or after the 1st day of April in any financial year. Nil 2. All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods. Nil 2. The exemption contained in this notification shall apply subject to the following conditions, namely : - (i) a manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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