TaxTMI 
TaxTMI 
2015 (10) TMI 844
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....gricultural tractors and parts & components thereof. The appellant converted their EOU into DTA unit on 08.08.2011. On conversion of DTA unit, the appellant had discharged the applicable duties on the inputs in stock, inputs contained in finished goods and Work in Progress (WIP) as envisaged in the provisions due to the reason that being a EOU they have received inputs without payment of duty. After reversing / paying the duty on conversion to DTA there was a carry-over of unutilized credit lying in balance. The appellant utilized this credit towards discharge of the duty liability in respect of goods cleared from DTA unit. The department issued a show cause notice to the appellant directing them to show cause notice as to why CENVAT credit....
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....e. It is his submission that provisions of Rule 11 of the Cenvat Credit Rules will be applicable only when the appellant is manufacturing exempted goods and not when various goods are manufactured and duty liability is discharged. He would draw our attention to the registration granted by the Central Excise authorities and submit that the registration clearly states that appellant is manufacturing agricultural tractors and parts, aggregates and components of tractors. He would then explain the aggregates and components & parts of tractors or various items are required for repair of the tractors if need be and are cleared to the market on payment of proper excise duty and there is no exemption to these aggregates components and parts of trac....
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.... WIP; carried forward the credit lying in balance in CENVAT credit in the books of DTA. It is also undisputed that the appellant had utilized this carried forward Cenvat Credit for discharge of duty liability on aggregates, components and parts of tractors which are not exempted when cleared into home consumption; agricultural tractors which are cleared by the appellant are exempted by notification 6/2006-CE dated 01.03.2006. 6.1 The entire case of the Revenue is that the amounts which have been carried forward after reversal of appropriate duty on the inputs lying in stock, finished goods and WIP, the balance credit lapses as per the provisions of sub-rule 3 of Rule 11 of Cenvat Credit Rules while it is the case of the appellant that th....
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....shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported." 6.3 It can be seen from bare perusal of the sub-rule the same will apply only in a situation where final products are exempted and lying in stock. In our considered view the above sub-rule may not be applicable in the facts of this case which is not disputed that there is a discharge of Central Excise duty liability on the other finished products manufactured and cleared like aggregates, components & parts of tractors. The above said view, is fortified by the judgement of the Tribunal in the case of Shree Baba (su....