2016 (6) TMI 1496

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....g 72221119, 72111450 of the first schedule to the CETA, 1985. The appellant was availing exemption as an SSI unit under notification number 08/2003-CE dated 01.03.03. As the appellant exceeded the SSI limit of Rs. 150 lakhs on 17.11.2009, they gave intimation to the revenue that on and from 18.11.2009, they will pay tax at normal rate and also be availing Cenvat credit. Request was also made for verification of stock. That Rule 3 (2) of Cenvat credit Rules provides, an assessee being a manufacturer of final products is allowed to take Cenvat credit of the duty paid on inputs lying in stock or in process on inputs contained in the final products lying in the stock on the date on which such goods manufactured by the said manufacturer, ceased ....

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....s in violation of rule 11 (4) of the Central Excise Rules and accordingly the appellant was required to show as to why not penalty be imposed under rule 27 of the Rules. 3. The appellant contested the show cause notice by filing reply. It is explained that so far availing of Cenvat credit is concerned the credit was taken during the last one month from 18.11.2009 in anticipation and under conscious knowledge that the inputs on which credit had been taken shall not be utilized in clearance of goods under exemption. It was further contended that the appellant had only taken credit and not utilized the same and as such there is only a technical breach of the provisions of rule 3 (2) of the CCR as admittedly there had been no utilisation of ....

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....y. In absence of any permission from the proper authority it was held that the appellant have violated the rule and is liable to penalty and accordingly penalty of Rs. 5000/- was imposed under rule 27. 5.  Being aggrieved the appellant preferred appeal before the Commissioner Appeals, vide the impugned order dated 11/11/2011, held that the Provisions are mandatory as the phrase "shall be" and "shall avail" manifestly emphasize that the manufacturer are not allowed to avail the credit of duty on inputs until the aggregate value of first clearances does not exceed the exemption limit. It was further held that there is no accommodation in the law for the averments of the appellant that provisions under the Cenvat credit rules and notif....