Case Law Details
Jansons Textile Processors Vs Commissioner of Central Excise & ST Salem (CESTAT Chennai)
The facts of the matter are that appellants are manufacturers of cotton textile fabrics and made ups. They were clearing some of the final products on payment of duty as per Notification No.29/2004-CE and claimed exemption under notification No.30/2004-CE on other products. With effect from 11.05.2008, they opted to clear all the goods claiming exemption under notification No.30/2004-CE– At the time of exemption, appellants had reversed cenvat credit of Rs.1 ,88,337/- on inputs held in stock as on 11.05.2008. After reversal of such credit, appellants still had a balance credit of Rs.2,82,375/- in the cenvat credit account. Department took the view that even this cenvat credit balance amount should lapse in view of the provisions of Rule 11 (3) (ii) of Cenvat Credit Rules, 2004 (CCR). Accordingly, a show cause notice dt. 15.05.2009 was issued to the appellants proposing that the said balance credit should be treated as lapsed and also proposing imposition of penalty under Rule 15 (2) of CCR. In adjudication, the original authority vide an order dt. 29.10.2009 confirmed the said proposals and also imposed equal penalty under rule 15 (2) of CCR. In appeal, the Commissioner (Appeals) vide impugned order dt. 19.07.2010 set aside the imposition of penalty, however upheld the remaining part of the order of original authority. Hence the appellants are before this forum.
2. Today when the matter came up for hearing, on behalf of the appellant, Ld. Consultant Shri M. Saravanan made oral and written submissions which can be broadly summarized as under :
i. Rule 11 (3) (ii) of CCR will not apply in this case as only in case of final product when exempted absolutely under Section 5A of the Act, the credit would
ii. In this case, notification No.30/2004-CE opted for by the appellants w.e.f. 05.2008 is a conditional notification and hence not an absolute exemption notification.
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