2017 (3) TMI 371

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... appellant preferred to pay 10% value of the e-bikes on their clearance even after exemption notification on the premise that as appellant is manufacturing both e-bikes and parts thereof and parts are dutiable and appellant is not maintaining separate account of inputs of dutiable as well as exempted final products, therefore, as per Rule 6(3) of the Cenvat Credit Rules, 2004, the appellant is required to reverse 10% of the value of the exempted goods. The Revenue is of the view that as appellant is manufacturing e-bikes which has been exempted from levy of duty on 29.04.2008, therefore, they are not liable to pay duty on e-bikes and the cenvat credit lying in their cenvat account on 29.04.2008 shall lapse in terms of Rule 11(3) of the Cenv....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... that the credit lying in their cenvat account on 29.04.2008 shall lapse in terms of Rule 11(3) of the Cenvat Credit Rules, 2004. He also submits that in their own case, this Tribunal vide Order No. A/60995-61000/2016-EX(DB) dated 20.07.2016 hold that the provisions of Rule 11(3) of the CCR, 2004 are not applicable. 5. On the other hand, ld. AR submits that the appellant was manufacturing only e-bikes and same has become exempted.  In the registration certificate also the appellant has shown that they are manufacturing e-bikes, in that circumstances the cenvat credit lying in the cenvat credit account on 29.04.2008 shall lapse in terms of Rule 11(3) of the Cenvat Credit Rules, 2004. Therefore, duty is demandable on clearance of part....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ical therefore, these are being taken up for disposal under this common order. The main issue required to be deliberated upon is whether the accumulated credit lying their RG-23A Part-II accounts stands lapsed after the E-bikes were exempted from payment of duty under Notification No. 25/2008-CE dated 29.04.2008 effective from 29.04.2008. Department is of the view that since E-bikes are exempted w.e.f. 29.04.2008, therefore, credit lying in Appellants RG-23A Part-II stood lapsed in view of Rule 11(3) (ii) of the Credit Rules. On the other hand appellants have argued that they are manufacturing two products namely E-bikes and parts of E-bikes. The latter gets manufactured as per Section 2(f)(iii) of the Act read with third schedule to the Ce....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the Appellants. However, it does not mean that declaration made by the Appellants only means electrically operated bikes (E-bikes) falling under Central Excise Tariff Heading 87119091 are manufactured by them. Appellants have also enclosed Form ER-1 with their appeal memorandum which is a monthly return for production and removal of goods for the month of March, 2009. ER-1 filed by the appellants with the department, clearly indicates E-bikes parts, falling under Central Excise Tariff Heading 8714, cleared during the relevant period alongwith the rate of duty and amount of duty paid in the relevant columns of ER-1 returns filed. Further, the returns filed by the appellants indicate the quantity manufactured, quantity cleared and the assess....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... parts was admissible @ 21% adv., which lead to accumulation of Cenvat credit in statutory records. 7.1 However, as per para 3(iii) above appellants started importing E-bikes in CKD condition w.e.f. 01.07.2008 vide Bill of Entry No. 531 dt. 01.07.2008. It means parts in CKD condition which distinguished from other common parts like batteries etc. The CKD parts were, therefore distinguishable and relatable to the finished E-bikes. The credit with respect to such CKD part lying as such or in works-in-progress or those contained in the finished E-bikes as on 29.04.2008 was required to be reversed under the Credit Rules. To that extent impugned orders is required to be upheld alongwith interest due under Section 11AB of the Act. The re....