2022 (2) TMI 1119 - HC - Central Excise

Court dismisses appeals challenging manufacturer's Cenvat Credit eligibility near ports.

M/s SALUJA EXIM. (NOW M/s SE EXPORTS) Versus THE COMMISSIONER, COMMISSIONERATE OF CENTRAL EXCISE, CENTRAL REVENUE CHANDIGARH.

M/s SALUJA EXIM. (NOW M/s SE EXPORTS) Versus THE COMMISSIONER, COMMISSIONERATE OF CENTRAL EXCISE, CENTRAL REVENUE CHANDIGARH. - 2022 (381) E.L.T. 63 (H. ... Issues:1. Interpretation of Cenvat Credit Rules regarding goods stored in port area.2. Entitlement of manufacturer to claim Cenvat Credit on goods stored near ports.3. Determination of goods as 'goods in stock' for Cenvat Credit purposes.Analysis:1. The judgment involves appeals arising from a common order passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi Principal Bench, regarding the interpretation of the Cenvat Credit Rules in relation to goods stored in port areas by a manufacturer of readymade garments falling under Chapter heading 61 of the Central Excise Tariff Act, 1985.2. The appellant contended that it was entitled to claim Cenvat Credit on goods stored in its godown near the port area prior to 1st April, 2003, as per the provisions of the Cenvat Credit Rules. The respondent-department, however, argued that since the goods had been removed to the port area from the factory based on invoices issued to purchasers, they could not be considered as part of the manufacturer's stock.3. The Court examined Rule 9-A of the Cenvat Credit Rules, which allows manufacturers to avail credit equal to duty paid on inputs of finished products lying in stock as on 31st March, 2003, upon making a written declaration. In this case, it was established that the goods in question had been removed from the factory to the port area based on commercial invoices and were intended for export, not subjected to duty liability at the factory. The Adjudicating Authority rightly concluded that these goods were no longer part of the manufacturer's stock and could not be claimed for Cenvat Credit.4. The judgment emphasized that for a manufacturer to avail Cenvat Credit under Rule 9-A, the goods must be genuinely lying in the manufacturer's stock as on the specified date. Since the goods had been physically moved to the port area based on invoices indicating buyer details, they were not considered part of the manufacturer's stock, leading to the dismissal of the appeals challenging the Tribunal's decision.5. Ultimately, the Court found no grounds to interfere with the impugned order dated 22.02.2011, as the goods stored near the ports were deemed to have been removed from the manufacturer's premises and not eligible for Cenvat Credit. Consequently, the appeals were dismissed, and any pending miscellaneous applications were also disposed of accordingly.