TaxTMI 
TaxTMI 
2013 (9) TMI 292
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.... had accumulated prior to 01/06/2007 and utilised the same towards service tax liability with effect from 01/06/2007. The department was of the view that the appellant could not have utilised the Cenvat Credit as the credit which accumulated prior to 01/06/2007 lapsed and therefore, utilisation of lapsed credit was wrong. Accordingly, a demand towards wrong utilisation of Cenvat Credit to the extent of Rs.10,84,53,929/- was confirmed against the appellant, under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73 of the Finance Act, 1994. Interest on the said demand also confirmed under section 14 of the Finance Act, and penalties were imposed under Section 78 of the said Act read with Rule 15(4) of the Cenvat Credit Rules, 2004. ....
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.... The appellant utilised the accumulated credit towards the discharge of service tax liability. There was no provision in the Cenvat Credit Rules, for lapse of accumulated credit. Thereafter, the Cenvat Credit Rules were amended on 01/04/2008 wherein the earlier sub-rule (3) was amended and replaced with new sub-rule (3) which read as follows:- (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow any one of the following options, as applicable to him, namely:- (i) the manufacturer of goods shall pay an amount equal to ten percent of value of the exempted goods and the provider of outp....
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....of Excise and Customs New Delhi Subject: Utilization of accumulated CENVAT credit restricted in terms of Erstwhile Rule 6 (3) (c) CENVAT Credit Rules, 2004 - reg. Kindly refer to your letter C.No.715/Hqrs/Audit/08 dated 20/11/2008 on the subject mentioned above wherein the issue of utilization of accumulated CENVAT credit has been raised. The matter has been examined and the following points emerged during its consideration,- Prior to 1.4.2008 [before the amendment in rule 6 (3)] the option available to the taxpayer, under rule 6(3), was that, he was allowed to utilize credit only to the extent of an amount....
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..../04/2008. Further, it must be kept in mind that taking of credit and its utilization is a substantive right of a taxpayer under value added taxation scheme. Therefore, in the absence of a clear legal prohibition, this right cannot be denied. Pending issues may be decided accordingly." From the above clarification, it is clear that the accumulated credit does not lapse and Rule 6(3) does not bar the utilisation of accumulated credit for discharge of tax liability after 01/04/2008. In view of the above, the denial of service tax in the impugned order is not sustainable in law. 3.3 The ld. Consultant also points out that the reliance placed by the adjudicating authority on the decision of the apex court in the case of CCE....
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....nied the Cenvat Credit. Accordingly he prays for grant of stay. 4. The Ld. Commissioner (AR) appearing for the Revenue on the other hand reiterates the findings of the adjudicating authority. 5. We have carefully considered the submissions made by both the sides. 5.1 On a plain reading of the impugned order, we find that the adjudicating authority has denied the credit on the premise that on 01/06/2007 whatever credit had been accumulated in the books of accounts of the assessee would lapse. On going through the Cenvat Credit Rules, 2004, as they stood at the relevant point of time, we do not find any provision of law to come to such a conclusion. The CBE and C's Circular dated 21/11/2008 also confirms that the accumulated credit w....