TaxTMI 
TaxTMI 
2010 (3) TMI 60
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....d, is that the assessee was engaged in manufacture of Knitted Fabrics and Garments. During the course of scrutiny of the returns for the quarter ending June, 2003 and Cenvat return for the month of April, 2003, it revealed that the assessee availed the deemed Cenvat credit under Rule 9A(3) of the Cenvat Credit Rules, 2002 (for short "the Rules"), as per Notification No.35/2003-CE dated 10.4.2003, in respect of the goods lying in stock as on 31.3.2003. In response to a query of the concerned department, the assessee, vide their calculation sheet dated 20.4.2004, provided the details of credit availed by it. On examination of the calculation sheet, again it revealed to the authority that the assessee has availed the excess Cenvat credit. Consequently, a show cause notice was issued as to why the Cenvat credit claimed by the assessee be not recovered alongwith appropriate interest under Rule 12 of the Rules read with section 11A of the Central Excise Act, 1944 (hereinafter to be referred as "the Act") and penal action under Rule 13 be not taken against it for the contravention of Rules 3 and 9A of the Rules. 3. In the wake of notice, the assessee filed the reply explaining therein ....
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....nnot legally be sustained and the present appeals deserve to be accepted. 11. It is not a matter of dispute that the Tribunal has negatived the claim of the assessee only on the ground that the provisions of subsequent amendment of notification No.47/2003-CE dated 17.5.2003 would operate retrospectively. 12. Again, it is a matter of fact that the assessee availed the Cenvat credit in terms of the provisions of Rule 9A of the Rules, which is reproduced as under:- "9A. Transitional provisions for Textile and Textile Articles. (1)A manufacturer, producer, first stage dealer or second stage dealer of yarn and unprocessed fabrics falling under Chapters 50, 51, 52, 53, 54, 55, 58, 59 or 60 of the First Schedule to the Tariff Act or a manufacturer of processed fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58, 59 or 60 of the First schedule to the Tariff Act shall be entitled to avail credit equal to the duty paid on inputs of such finished product, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of inputs (Whether lying in st....
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....iii) in all other cases, in such manner as may be notified by the Central Government in this behalf. Explanation-For removal of doubts, it is hereby clarified that the entire amount of credit as eligible under sub-rule (1) and/or (2) shall be calculated by the assessee himself who can take credit accordingly." 13. Thus, a co-joint reading of these provisions would reveal that the assessee was entitled to avail the Cenvat credit of duty on such finished products or in process or contained in finished products and one each such inputs lying in stock and in process to be calculated on the basis of such rates or such manner as may be notified by the Central Government in this behalf. 14. The Central Government, in exercise of the powers conferred by sub-rule(3) of Rule 9A of the Rules, issued Notification No.35/2003-CE dated 10.4.2003 and declared that the amount of credit of duty as specified in Column (3) of the Table below, on inputs lying in stock or in process or in inputs contained in finished goods lying in stock, as specified in the corresponding entry in Column (2) of the said table, which is as under:- Sr.No. Description Amount of credit (1) (2) ....
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....containing any other textile material; Declared value multiplied by 26% of the rate of duty on such unprocessed fabrics. (b) Unprocessed fabrics other than (a) above; Declared value multiplied by 60% of the rate of duty on such unprocessed fabrics. (c) Yarns, which were eligible for exemption, as on 31st March, 2003, from the whole of the excise duty under Notification No.6/2002, Central Excise, dated the Ist March, 2002 (other than the shoddy yarn purchased or procured from outside the factory, and subjected to any process); Deemed value multiplied by the rate of duty on such yarn. (d) Article of apparel and clothing accessories falling under Chapter 61. Declared value multiplied by 12% of the rate of duty on such article of apparel and clothing accessories. 16. The argument of learned counsel for the revenue that since the amount of cenvat credit is required to be calculated as per the amended provisions of Notification No.47/2003-CE dated 17.5.2003, so the assessee availed the same in excess, is not only devoid of merit but misplaced as well, because entry at Serial No.2 of the Table was only substituted on 17.5.2003, much after th....