TaxTMI 
TaxTMI 
2018 (4) TMI 1029
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....hedule to the Central Excise Tariff Act, 1985. 3.The assessee, being a SSI Unit, had availed the benefit of exemption under Notification No.8/2003-C.E., dated 01.03.2003, as amended every year, since the inception of the Unit. Like that, during the years 2004-2005 and 2005-2006, though the assessee had availed the SSI exemption under notification as mentioned above, it had failed to pay the amount of duty under Rule 11(2) of Cenvat Credit Rules, 2004, equivalent to Cenvat credit availed by them on inputs and finished goods lying in stock as on 31.03.2005 and 31.03.2006. 4.Because of such alleged non payment of duty or for reversal of Cenvat credit under Rule 11(2) of Cenvat Credit Rules, 2004, the revenue issued a show cause notice on 28.03.2007, requiring the assessee to show cause as to why the amount of duty and education cess, should not be demanded with interest from the assessee under Rule 14 of Cenvat Credit Rules, 2004. 5.It is the claim of the assessee that during February and March, 2006, the assessee crossed the limit of claiming exemption under SSI notification. Hence, the assessee started to pay excise duty on their clearances in February and March, 2006. 6....
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.... that, against the said order passed by the Commissioner (Appeals) dated 21.05.2009, the revenue preferred an Appeal before the CESTAT, Chennai, the CESTAT, in its order dated 18.08.2011, reversed the said decision of the Commissioner (Appeals) and allowed the appeal filed by the Revenue. 14.Aggrieved over the said Final Order passed by the CESTAT, Chennai, in Final Order No.1021/2011 dated 18.08.2011 in Appeal No.E/489/2009, the assessee preferred this Civil Miscellaneous Appeal before this Court. 15.We have heard Mr.K.Jayachandran, learned counsel appearing for the appellant/assessee and Mr.A.P.Srinivas, learned Standing Counsel appearing for the Revenue. 16.The instant appeal had been admitted on 13.02.2012 with the following substantial questions of law: (a) Whether in the facts and circumstances of the case, Rule 11(2) of Cenvat Credit Rules, 2004, provides the manufacturer shall be required to pay an amount equivalent to the Cenvat Credit allowed to him in respect of inputs lying in stock or in process or contained in final product lying in stock? (b)Whether the Tribunal is right in holding that the credit of duty paid on inputs utilized in the manu....
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....having considered a number of decisions in this regard, had allowed the appeal filed by the assessee, the CESTAT, by simply following the decisions made in Albert David Limited of the Principal Bench of CEGAT, New Delhi, dated 28.11.2002, stating that the same has been confirmed by the Hon'ble Apex Court. However, the fact remains that when the order of the CEGAT was appealed by the assessee in that case before the Hon'ble Apex Court, there was no detailed finding given and it was a summary disposal of the appeal by the Hon'ble Apex Court and therefore, the said decision ought not to have been pressed into service by the CESTAT. The learned counsel appearing for the assessee would further argue that, the decision of the High Court of Himachal Pradesh at Shimla in the matter of Commissioner of Central Excise, Chandigarh v. Tyre Tops reported in 2010 (250) E.L.T. 338 (H.P.), should have been taken into account, which is exactly on the point raised in this case. 21.The learned counsel appearing for the assessee would further submit that, since nowhere in the show cause notice, it was stated about the invocation of proviso to Section 11A of the Customs and Central Excise....
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....again reverted back to the position of claiming exemption under SSI Notification, 2003. The learned counsel would also submit that the decision taken by the CESTAT in the order impugned fully relying upon the decision of the Tribunal's Principal Bench in Albert David's case, is fully justifiable, because the said case of the Tribunal has been confirmed by the Hon'ble Apex Court in 2003 (157) E.L.T. A.81, (SC). 27.The learned Standing counsel would further submit that, in the said decision, the Hon'ble Apex Court has held that, the credit taken on inputs used in the manufacture of goods, which were subsequently exempted, had recoverable, when the demand raised only in respect of inputs lying unutilized. By raising these points, the learned Standing Counsel would submit that, the order of the CESTAT is fully sustainable, in view of the said decision in Albert David's case, which is holding the field and therefore, the impugned order of the CESTAT, does not require any interference from this Court. 28.We have considered the said rival submissions made by the learned respective counsel appearing for the parties and also perused the materials placed before this....
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....3 348.99 Exempted Period Feb.2006 to March 2006 348.00 72.46 20.6 400.85 Dutiable Period From the above table it could be seen that the assessee has a balance stock of 400.85 MTS as on 31.3.2006. The assessee has commenced paying full rate of duty after availing cenvat credit from Feb 2006. The assessee has purchased imported scrap of 72.46 MTS during Feb 2006 to March 2006. The assessee has issued 20.600 MTS towards production. In as much as the assessee had a balance of 348.99 MTS of imported scrap on which cenvat was not availed by them, it has to be reckoned that the issue of 20.60 MTS was from the balance of stock as on 31.3.2006 according to First in First Out Principle. Hence, it is clear that the closing stock of 400.85 MTS contains 72.40 MTS of imported scrap on which cenvat credit has been availed. The cenvat credit availing being Rs. 1,56,090/- duty & Rs. 3,122/- Education Cess vide BE No.970758 dated 28.2.06. b)Cenvat Scrap Stock: NIL Qty. in MTS Period OB Receipt Issued for prodn Second sales CB Remarks A....
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....360 21508 430 2 00166 dated 07.02.06 11.250 21300 426 3 00165 dated 06.02.06 11.380 21546 430 4 00164 dated 06.02.06 11.350 21489 430 5 00163 dated 04.02.06 11.210 21224 424 6 00162 dated 04.02.06 11.500 21773 435 7 29 dated 03.02.06 11.075 20543 411 8 28 dated 03.02.06 11.745 21804 436 Total 90.87 171187 3422 Thus 90.87 MTS is the cenvat availed inputs (scrap) contained in the finished goods & misrolls stock as on 31.03.2006 and the duty to be reversed thereon works out to Rs. 1,71,187/- besides Edu Cess of Rs. 3,482/-. d) The total duty payable as on 31.03.2006 is given below: Sl.No Description Duty (Rs) Edu.Cess (Rs.) a) Duty payable on imported scrap of 400.85 MTS. As per Sl.No.9(a) of this notice 156090 8122 b) Duty payable on cenvat availed scrap of 90.87 MTS contained in the finished goods & Misrolls available on stock as on 31.03.2006 as per Sl.No.9(c) of this notice &nbs....
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....ne of proceeding issued by the revenue to claim the unpaid duty or short paid duty by reversing the wrongly availed Cenvat credit either during the exemption period or for the stocks available as on 31.03.2006, which would be naturally utilized for manufacturing beyond 31.03.2006, i.e., the regime of the exemption period under SSI notification. 34.We have also perused the impugned Judgment of the CESTAT, which mainly relied upon the decision of the Principal Bench of the Tribunal in Albert David Limited vs. Commissioner of Central Excise, Meerut, in 2003 (151) E.L.T. 443 (Tri.-Del.). 35.The Tribunal, in the said decision had considered the decisions in (1)Collector v. Dai Ichi Karkaria, [1999 (112) E.L.T. 353 (S.C.)], (2)Collector v. Premier Tyres Limited, [2001 (130) E.L.T. 417 (Ker.)], (3)Commissioner v. Ashok Iron and Steel Fabricators, [2002 (140) E.L.T. 277 (Tribunal-LB)], and (4)Super Cassettes Industries Limited v. UOI, 1997 (94) E.L.T. 302 (All.) 36.The case in the said Albert David Limited was that, the assessee in that case has taken a Cenvat credit in their books of account, on the I.V. Fluids, which were chargeable to duty and subsequently, the said I.V. Fluids....
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....in one year of such utilization, demand is within the time limit specified in the Act and Rules. We are, however, of the view that in the facts and circumstances of the case, no penalty is imposable on the Appellants. We order accordingly. 6.The Appeal stands disposed of in above terms." 38.When the said decision of the Tribunal was appealed to the Hon'ble Apex Court, the Hon'ble Apex Court has held, while dismissing the said appeal filed by the assessee that, after taking note of the fact that the Tribunal in Albert David's case, that the credit taken on inputs used in the manufacture of goods which were subsequently, exempted be recoverable, as the demand was raised in respect of input lying and utilized (Albert David Limited v. Commissioner-2003 (157) E.L.T. A81 (S.C.). 39.So, the crux of the issue, which was decided in Albert David's case, in our opinion, is that, whether the revenue is entitled to recover the credit taken by the assessee on inputs, which used in manufacture of goods, during the time of exemption in respect of input lying unutilized. 40.Here in the case in hand, it is an admitted fact that from the inception, the assessee had b....