AI Drafter 
TaxTMI 
TaxTMI 
2019 (3) TMI 1216
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.... bulk drugs and menthol products. The products are being manufactured become exempt for payment of duty w.e.f. 01.03.2008. The Revenue is of the view of that as the appellants have started manufacturing exempted goods, therefore, the Cenvat credit lying in their Cenvat credit account contained in inputs/ semi finished goods/ finished goods shall lapse in terms of Rule 11 of the Cenvat Credit Rules, 2004. Therefore, the proceedings were initiated and it was held that the appellants are required to reverse the Cenvat credit lying in their Cenvat credit account. Consequent to that the appellants are before us. 3. The Ld. Counsel for the appellants submits that at the time of availment of Cenvat credit, there was no such provision for revers....
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....it, the appellants were entitled to avail Cenvat credit on inputs/input services and capital goods. Later on, their final goods became exempt; therefore, the case of the Revenue is that the Cenvat credit lying in their Cenvat credit account shall lapse. 8. For better appropriation, the provisions of Rule 11 of the Cenvat Credit Rules, 2004 are incorporated as under: "Rule 11. Transitional provision.- (1) Any amount of credit earned by a manufacturer under the CENVAT Credit Rules, 2002, as they existed prior to the 10th day of September, 2004 or by a provider of output service under the Service Tax Credit Rules, 2002, as they existed prior to the 10th day of September, 2004, and remaining unutilized on that day shall be allowed as C....
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....as been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and 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. (4) A provider of output service shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for providing the said service and is lying in stock or is contained in the taxable service pending to be provided, when he opts for exemption from payment of....
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....ase of M/s Shiv Engineering Industries (supra), wherein in terms of Rule 3(5) of the Cenvat Credit Rules, 2004, if the inputs were cleared as such, the assessee is required to reverse the Cenvat credit taken on such inputs in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. But in case, if the Cenvat credit has not been reversed then how the same is recoverable. In the said case, this Tribunal has observed as under: "7. On careful consideration of submissions made by both sides, I find that Rule 3(5) of the Cenvat Credit Rules, 2004 which reveals the situation is extracted here below: "(5) when inputs or capital goods, on which cenvat credit has been taken, are removed as such from the factory, or premises of the provider of....
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.... not a case that the appellant has taken cenvat credit wrongly. Further, from the facts of case and allegation of made in the show cause notice it is not coming out whether the said cenvat credit has been utilized by the appellant or not? Therefore, benefit of doubt goes in favour of the appellant. Further, it is not the case of erroneously refund to the appellant. In that circumstances, provisions of Rule 14 are not applicable to the facts of this case, therefore, in the facts and circumstances of the case Rule 14 are not applicable. In view of the above, it is not necessity to analyze the decision of the Hon'ble Apex Court in the case of Sulochana Amma (Supra) to decide whether the explanation given under Notification No. 3/2013-CE (NT) d....
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....e Ld. A.R., observed as under: "20. In the instant case, it is not a matter of dispute that the assessee has paid the duty on inputs used in the indicated manufacturing of final goods, the assessee has maintained separate accounts/record, duly entered credit of duty-paid on the inputs in manufacture of final goods and validly availed the Cenvat credit. Therefore, the same cannot be reversed on the ground that the final product (i.e. agricultural Tractors) were subsequently exempted from tax. Thus, the contrary arguments of the learned counsel for the Revenue 'stricto sensu' deserve to be and are hereby repelled under the present set of circumstances. No contrary judgment has been cited on behalf of the Revenue. Therefore, the aforesaid j....