2019 (2) TMI 936 – CESTAT MUMBAI – TMI – SSI Exemption – Reversal of CENVAT Credit – amount equivalent to the Cenvat Credit contained in respect of inputs received for use in the manufacture of final product, which are lying in stock as on 1.4.20007 – proviso of Rule 11(2) & 11(3) of the Cenvat Credit Rules, 2004 – option exercised for exemption of Excise duty, under N/N. 8/2003-CE dated 1.3.2003.
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Held that:- Reliance placed in the appellant own case for the earlier period COMMISSIONER OF CENTRAL EXCISE, NASHIK VERSUS M/S TIRUPATI PIPES & ALLIED INDS. PVT. LTD. [2009 (12) TMI 1020 – CESTAT MUMBAI], where it was held that while opting for SSI exemption the assessee is not required to reverse the CENVAT Credit.
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Appeal allowed – decided in favor of appellant. – APPEAL NO: E/87658/2018 – A/85278/2019 – Dated:- 13-2-2019 – Shri Ajay Sharma, Member (Judicial) Appellant: Shri Mayur Shroff, Advocate Respondent: Shri A.B. Kulgod, Assistant Commissioner (AR) ORDER The issue to be de
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s letter dated 1.4.2007 informed that during the year 2006-07, the aggregate value of all excisable goods cleared by them for home consumption comes to ₹ 3,84,64,932/-. Therefore during the ensuing financial year 2007-08, they are entitled to avail full exemption from central excise duty, on their clearances upto an aggregate value of ₹ 1,50,00,000/- and have therefore opted out of Cenvat/Modvat facility w.e.f. 1.4.2007. They also informed the department about the position of Cenvat credit account as on the date of opting out of Cenvat and balance of inputs and finished goods containing the Cenvat credit lying with them as on 31.3.2007. 3. As per the department, the appellant after given the option letter to the competent authority, have cleared the excisable goods so manufactured at nil rate of duty of central excise including Ed. Cess & H.S. Ed. Cess from their factory by availing the benefit of aforesaid notification, even though they did not fulfill the condition la
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ules made thereunder, The Adjudicating authority dropped the proceedings vide Order-in- Original dated 2.2.2017 while relying upon the decision of this Tribunal vide order No. A/797/09/SMB/C-IV, dated 15.12.2009 in appellant s own case, on the identical issue, for earlier financial year. The Adjudicating authority also relied upon the decision of the Hon ble Supreme Court. The Adjudicating authority dropped the proceedings vide Order-in-in the matter of CCE, Pune vs. Dai Ichi Karkaria; reported in 1999(112) ELT 353 (SC) while dropping the proceeding initiated by the revenue against the Appellant. On Appeal filed by the Revenue, the Commissioner (Appeals), Central Tax and Central Excise, Nasik vide impugned order dated 27.3.2018 partly allowed the Appeal filed by Revenue and reduced the demand to ₹ 8,26,078/- alongwith interest. 4. I have heard ld. Counsel for the appellant and ld. Authorised Representative for the Revenue and perused the records. Ld. Counsel for the Appellant sub
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guish them on some flimsy ground. The ld. Authorised Representative appearing on behalf of Revenue defended the findings recorded in the impugned order and after reiterating the same, prayed for dismissal of Appeal. 5. From the tenor of the order passed by the Commissioner (Appeals), I am of the view that the course adopted by him is not justified. Judicial propriety demands that when there is an order of higher forum available, that too in assessee s own case, the same has to be followed by the lower authority unless certain distinguishing features are pointed out by such lower authority or the order of the higher authority is reversed or suspended. Nothing of this sort has happened in the present case. It is true that the department has preferred an Appeal before the Hon ble High Court against the order of this Tribunal. However, the Appeal was dismissed as withdrawn due to monetary limits. This fact itself is not sufficient to empower the Commissioner to take different view and not
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ms of the exemption, it is to be noted that exemption is in terms of notification issued from year to year and not in terms of Rule 9(2) of Cenvat Credit Rules. There is no reference or incorporation of the condition of Rule 9(2) in those notifications. That apart, Rule 9(2) cannot be interpreted in a manner as to undermine the indefeasibility of Modvat credit. A reading of the said rule would make it clear that what is required in terms of the rule is to determine the Cenvat credit taken on the inputs in stock and debit it from the credit balance, "if any , lying in assessee s credit, and further credit balance, "if any , lapsing and not recall of Modvat credit already utilised correctly. If the Rule contemplated additional cash payment on account of balance in Cenvat credit being insufficient, the Rule would not have qualified the credit balance as balance if any . The addition of those words make it clear that Cenvat credit balance alone is contemplated and no additional p
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id by them on those inputs when these final products were chargeable to excise duty. It has further been found that there was no one to one relationship of the inputs used and the final products manufactured and cleared from the factory. It has rightly been held that the credit of duty paid on inputs cannot be confined to a particular raw material to which the credit is related and out of which a final product is manufactured. Therefore, it has been rightly held that the assessee-respondent were not required to reverse the Cenvat credit of ₹ 88,731/- The judgment of the Hon ble Supreme Court in Dai Ichi Karkaria case has been correctly applied. There is thus no merit in these appeals which are accordingly dismissed. 6. This Tribunal also while deciding the appeal filed by the appellant for the earlier financial year, vide order No.A/797/09/SMB/C-IV, dated 15.12.2009, relied upon the decision of the Hon ble High Court in the matter of CNC Commercial Ltd.(supra) and held as under:-
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