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of <h1>Tribunal allows EOU to use CENVAT Credit post-conversion, aligning with rules and granting relief.</h1> The Tribunal ruled in favor of the Appellant, affirming their entitlement to avail and utilize the accumulated CENVAT Credit balance upon conversion from ... Conversion of DTA unit to an 100% EOU - whether CENVAT Credit lying in balance at the time of conversion can be availed and utilized by the 100% EOU? - Held that:- Appellant had availed CENVAT Credit as per CENVAT Credit Rules and it does not prohibit the domestic unit converted into an 100% EOU, availing and utilizing the CENVAT Credit lying in balance. Prior to amendment of Rule 17 of Central Excise Rules, 2002, an 100% EOU was not allowed to pay duty by utilizing the cenvat/modvat credit. This aspect has been deliberated in detailed in Sun Pharmaceuticals Indus. Ltd case (2009 (5) TMI 849 - CESTAT CHENNAI). Also see GTN Exports Ltd’s case [2008 (7) TMI 377 - CESTAT, CHENNAI ] In view of the above consistent decisions of the Tribunal, we do not see any reason to record a different finding. Consequently, the impugned order is set aside and the appeal is allowed in favour of assessee Issues:1. Eligibility of accumulated CENVAT Credit on conversion of DTA unit to 100% EOU.2. Interpretation of relevant provisions, Circulars, and Rules.3. Applicability of EXIM Policy on CENVAT Credit transfer.Issue 1: Eligibility of accumulated CENVAT Credit on conversion of DTA unit to 100% EOU:The case involved a dispute over the Appellant's eligibility to avail and utilize the CENVAT Credit balance at the time of conversion from a DTA unit to a 100% EOU. The Appellant argued that previous Tribunal judgments and circulars supported their position, emphasizing that there was no prohibition on EOUs from utilizing such credits post-conversion. The Revenue contended that the EXIM Policy restricted the benefit of duties and taxes on conversion, thus affecting the admissibility of the CENVAT Credit balance.Issue 2: Interpretation of relevant provisions, Circulars, and Rules:The Tribunal examined previous judgments, Circular No. 77/99-Cus, and amendments to Rule 17 of Central Excise Rules, 2002. It was noted that prior to the amendment, there were no provisions barring EOUs from availing CENVAT Credit or utilizing it for duty payments. The Tribunal highlighted that the inconsistency between CENVAT Rules and Central Excise Rules had been addressed by legislative amendments, allowing EOUs to utilize CENVAT Credit.Issue 3: Applicability of EXIM Policy on CENVAT Credit transfer:The Tribunal deliberated on the impact of the EXIM Policy on the transfer and utilization of CENVAT Credit by EOUs post-conversion. Despite the Revenue's argument based on the EXIM Policy's restrictions, the Tribunal emphasized that the Appellant's adherence to CENVAT Credit Rules was crucial. The Tribunal concluded that the Appellant's entitlement to the CENVAT Credit balance was supported by consistent Tribunal decisions and upheld the appeal, granting consequential relief as per law.In conclusion, the judgment clarified the eligibility of accumulated CENVAT Credit on the conversion of a DTA unit to a 100% EOU, interpreting relevant provisions and emphasizing the importance of adherence to CENVAT Credit Rules. The Tribunal's decision aligned with previous rulings and upheld the Appellant's right to avail and utilize the CENVAT Credit balance, setting aside the impugned order and allowing the appeal with consequential relief.
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