Deemed-manufacturer status withdrawn, Cenvat credit on later inputs fails and export rebate cannot rest on inadmissible credit.

Withdrawal of the deemed-manufacturer regime under Rule 12B meant that inputs received after its omission could not attract Cenvat credit on the basis of that fictional status; credit was available only if the inputs were physically received in accordance with the prevailing rules on the relevant date. The text states that no reliable evidence showed the goods were already in transit before omission, so the credit was wrongly taken. It further states that duty paid on export clearances by utilising inadmissible credit could not support rebate under Rule 18, and the rebate claim was therefore not admissible.

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Issues: Whether cenvat credit could be taken on inputs received after the omission of Rule 12B of the Central Excise Rules, 2002 and whether rebate under Rule 18 of the Central Excise Rules, 2002 was admissible when export duty was paid by utilising such credit.

Analysis: The omission of Rule 12B with effect from 9-7-04 meant that the assessee was no longer a deemed manufacturer for goods received after that date. Cenvat credit was admissible only on physical receipt of inputs in accordance with the prevailing rules on the relevant date. The assessee produced no reliable evidence that the goods were in transit and had been cleared before the omission of Rule 12B. Since the credit was wrongly taken, its utilisation for payment of duty on export clearances could not validate the rebate claims.

Conclusion: The cenvat credit taken on inputs received after 8-7-04 was inadmissible and the rebate claims based on utilisation of that credit were not admissible.

Final Conclusion: The revision application failed and the rejection of rebate was sustained.

Ratio Decidendi: Where a deemed-manufacturer regime stands withdrawn, cenvat credit cannot be taken on inputs received thereafter, and duty paid by utilising such inadmissible credit does not qualify for rebate under the export rebate scheme.

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