TaxTMI 
TaxTMI 
2026 (1) TMI 1508
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....ort Oriented Unit (EOU). The appellant obtained in-principle exit from the Development Commissioner, Falta Special Economic Zone vide 'In-principle' Exit Order No. 2(1)M-4/2008/4547 dated 07.02.2012 and finally, de-bonded their 100% EOU vide letter No. 2(1)M4/2008/2691 dated 18.10.2012. The appellant paid central excise duty amounting to Rs.10,38,38,180/- vide Challan Nos. 50040 to 50048 dated 28.07.2012 against capital goods and stock of finished goods viz., pig iron and slag, which were lying in the EOU. 2. Out of the total duty paid by the appellant, central excise duty amounting to Rs.3,53,54,625/- (inclusive of cess) paid by them at the time of exiting their EOU vide Challan Nos. 50043, 50044, 50045 and 50046 dated 28.07.2012 pertai....
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....y thereon, the appellant has filed this appeal. 5. The appellant's submission is that there is no provision in the CENVAT Credit Rules to deny the CENVAT Credit of duty paid on finished goods at the time of debonding of the 100% EOU. It is their contention that the ld. adjudicating authority has not cited any specific provision in the CENVAT Credit Rules for denial of such credit. In support of their contention that CENVAT Credit is allowable in respect of duty paid at the time of debonding of a 100% EOU, the appellant relied upon the following decisions: - i. Commissioner of C.Ex., Pune v. Rajdhani Fab Pvt. Ltd. [2008 (221) E.L.T. 435 (Tri. - Mumbai)] ii. Commissioner of C.Ex. v. Annur Cotton Mills [2024 (387) E.L.T. 7....
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.... appellant paid duty on the capital goods, finished goods and inputs lying in stock at the time of de-bonding. After de-bonding, the appellant's unit became a DTA unit and they availed CENVAT Credit of the duty paid by them at the time of de-bonding. 8.1. The objection of the Revenue is that the appellant has paid duty on finished products and availed CENVAT Credit as 'inputs' which is not permissible. However, we find that the Revenue has not quoted any specific provision existing in the CENVAT Credit Rules which envisages denial of such CENVAT Credit availed on finished goods. It is a fact that at the time of de-bonding, the appellant had paid duty on the finished goods lying in stock as per the de-bonding permission granted by the Dev....
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.... Notification No. 22/2003-C.E. and para 6.20 of Chapter 6 of Export Import Policy 2002-07 and para 29.1 of Appendix 14-1; to the Handbook of Procedure, 2002-07, it is sufficient to prove that the 100% EOU at the time of debonding is bound to pay Central Excise duty on the indigenously procured capital goods; that if the above said paras of Export Import Policy and Handbook of Procedure are read together with para 8 of Notification No. 22/2003-C.E., it can be realized that they have correctly availed the credit of the said Central Excise duty. In this regard, it is seen that the Board vide Circular No. 185/19/96-CX dated 19-3-96 has clarified that Modvat credit can be allowed to the extent of CVD paid on imported capital goods or procured fr....
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....led by the revenue is rejected." 8.3. Further, a similar view has also been expressed by the Hon'ble Supreme Court in the case of Commissioner of C.Ex. v. Annur Cotton Mills [2024 (387) E.L.T. 7 (S.C.)]. 9. Therefore, we do not find any merit in the impugned order denying the credit to the appellant. Consequently, we set aside the impugned order and hold that the appellant has rightly availed CENVAT Credit on the finished goods, on which appropriate duty had been paid at the time of de-bonding of the 100% EOU. 10. As far as the appellant's contentions on the ground of limitation are concerned, we take note of the fact that the de-bonding of the 100% EOU and the payment of duty was well within the knowledge of the Department. In fac....