2017 (12) TMI 1090

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....es articles. The appellant during the period 1-5-2003 to 30-6-2004 cleared the textiles fabrics in terms of Rule 3(4A)(a) of Cenvat Credit Rules, 2002 in respect of consignments sold as cenvatable goods, Other consignments were cleared as commercial sales by reversing Cenvat credit on pro rata basis. Rule 3(4A) (a) of Cenvat Credit Rules, 2002 provides that first stage or second stage dealer dealing exclusively in goods falling under Ch. 52 to 63 of the Central Excise Tariff Act, may at his option, remove such goods on payment of an amount equal to the duty of excise leviable on such goods on the date of removal. The proviso thereunder provides that such option once exercised shall not be withdrawn during the remaining part of the financial....

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....sel argued that concept of 'deemed manufacturer' is only facilitation measure to enable textile traders to pass on credit. He argued that a common manufacturer can clear the inputs, as such, by reversing the Cenvat credit taken and same facility cannot be denied to a deemed manufacturer. Ld. Counsel relied on the decision of Hon'ble Apex Court in case of M/s. Chandrapur Magnet Wires Vs. Collector of Central Excise, Nagpur[1996(81)ELT 3(S.C.)] to ascertain that once the modvat credit is reversed, it is same as credit have not been taken. He argued that the provision of Rule 3(4A)(a) of Cenvat Credit Rules, 2002 provides that option once exercised by the dealer shall not be withdrawn during the remaining part of the financial year has....

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....at such option once exercised by the said dealer, shall not be withdrawn during the remaining part of the financial year; (b) the first or second stage dealer of goods referred to in clause (a), who avails of the option referred to in said clause, may take credit of duties referred to in sub-rule (1) of Rule 3, paid on such goods for utilizing the same for payment of such amount, as referred to in clause (a); (c) the amount paid under clause (a) shall be eligible as CENVAT credit as if it were a duty paid by a person who removes such goods under sub-rule (4A).] Perusal of above rule indicates that it is facility extended to the dealers who wish to pass the Cenvat credit to their buyers by way of invoices. However, it is seen that s....