TaxTMI 
TaxTMI 
2020 (2) TMI 902
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....ppellants are engaged in the manufacture of Colour Televisions, Refrigerators, Washing Machines, DVD Drives/DVD Writers and parts thereof falling under Chapter 84 & 85 of Central Excise Tariff Act, 1985. During the course of scrutiny of the records, it is revealed that one of their products viz. DVD Drive/DVD Writer falling under Chapter 84 of Central Excise Tariff Act, 1985 became unconditionally exempted w.e.f. 01.03.2007 under Notification No.6/2006-CE, dt.01.03.2006, as amended. The Appellants were availing CENVAT Credit on the inputs received by them before and after 01.03.2007 which were intended to be used on the manufacture of Optical Disc Drive (ODD). Alleging that since the Appellants were availing CENVAT Credit on inputs used in ....
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....g ODD in the domestic market on payment of duty and clearing for export under bond as well as under claim for rebate. The Appellant 100% EOU unit was set up on 22.03.2007. He has submitted that w.e.f. 01.03.2007, the ODD became unconditionally exempt by virtue of Notification No.6/2006-CE, dt.01.03.2006 as amended by Notification No.6/2007-CE, dt.01.03.2007. As on 01.03.2007, in relation to the said product, the Appellants were having in stock the duty paid inputs as such, forming part of work in progress and also contained in finished product. The total confirmed demand of Rs. 85,55,251/- comprises of credit of duty paid on inputs received during the month of March 2007 i.e. Rs. 52,60,795/- which were cleared as such by the DTA unit to the....
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....as such to their 100% EOU unit, directing reversal again of the credit attributable to such inputs under Rule 11(3)(ii) of CENVAT Credit Rules 2004 would be incorrect and it would result into an anomalous situation, whereby credit would be recovered twice on the same quantity of inputs. It is his contention that therefore, confirmation of demand of Rs. 32,94,456/- applying Rule 11(3)(ii) of CENVAT Credit Rules 2004 is unsustainable in law. With regard to the confirmation of demand of Rs. 52,60,795/- on the inputs received during March 2007 under Rule 6(1) of CENVAT Credit Rules 2004, the learned Advocate has submitted that the said Rule would not apply to the clearance of inputs as such to DTA unit in view of the provisions contained under ....
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....itled to refund the accumulated CENVAT Credit of Rs. 78,97,716/- under Rule 5 of CENVAT Credit Rules, 2004 on export of the finished goods. It is not in dispute that the finished goods manufactured by the Appellant i.e. DVD Drives/DVD Writers become unconditionally exempted from payment of duty w.e.f. 01.03.2007. At the time of exemption of the finished goods, the Appellants were having stock of inputs involving total credit of Rs. 32,94,456/-. Also, during the month of March 2007, they received inputs meant to be used in their said exempted final product amounting to Rs. 52,60,795/-. The contention of the Revenue is that in view of Rule 11(3)(ii) of CENVAT Credit Rules, 2004, the Appellants are required to reverse CENVAT Credit of Rs. 32,9....
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.... 3(5) of CENVAT Credit Rules, 2004 (5) When inputs of capital goods, on which CENVAT Credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9." 8. On plain reading of the Rule 11(3), it is clear that the manufacturer of a final product shall be required to pay an amount equivalent to the CENVAT Credit taken by him in respect of the inputs received for use in the manufacture of final product and lying in stock or is cont....