CENVAT credit admissibility on duty-paid clearances after Rule 12B omission upheld under the Central Excise framework.

CENVAT credit remained admissible after omission of Rule 12B where the assessee continued clearing processed goods on payment of excise duty. The governing principle was that credit is not denied merely because the special procedure under Rule 12B ceased to apply, provided the goods are duty-paid and the statutory conditions for availing credit under the Central Excise framework are satisfied. Rule 16 also supported admissibility on the facts because duty-paid goods were cleared on payment of duty equivalent to the credit taken, and that condition was fulfilled. The credit was therefore treated as valid.

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Issues: Whether CENVAT credit taken after omission of Rule 12B of the Central Excise Rules, 2002 remained admissible where the assessee continued to clear the processed goods on payment of excise duty.

Analysis: The appellant had operated under Rule 12B till its omission by Notification No. 11/2004-CE (NT) dated 9.7.2004. After that date, the appellant was no longer governed by Rule 12B, but it continued to pay excise duty on clearance of the processed goods, and the duty paid was more than the credit availed. The governing principle applied was that credit is not denied merely because the activity is treated differently after the special procedure ceased, so long as duty is paid on the goods and the statutory conditions for credit under the Central Excise framework are met. Rule 16 was also treated as supporting admissibility where duty-paid goods are cleared on payment of duty equivalent to the credit taken, and that condition stood satisfied on the facts.

Conclusion: CENVAT credit was held admissible, and the assessee succeeded on the issue.

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