2024-VIL-1410-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – 100% EOU - CENVAT credit, Clearance to Domestic Tariff Area - Appellant is a 100% EOU cleared certain inputs, which were earlier procured without payment of duty under CT-3 certificates, into the Domestic Tariff Area (DTA) by debiting the duty payable from the CENVAT credit account - Department objected to Cenvat Credit utilisation and initiated show cause proceedings proposing a demand of duty along with interest and penalty - Whether the CENVAT credit can be utilized for payment of duty on inputs procured duty-free and cleared as such by a 100% EOU into DTA - Demand of duty by invoking the extended period – HELD - the provisions of Rule 3(4) of CENVAT Credit Rules, 2004 do not permit the utilization of CENVAT credit taken on duty-paid inputs for payment of an amount equivalent to CENVAT credit on non-duty paid inputs (procured duty-free under CT-3 certificates) when removed as such by a 100% EOU unit – However, the Department was aware of the clearances made by the appellant as the jurisdictional central excise authorities had granted specific permissions for such removals - As the appellants had discharged such duty payable on these goods, by debiting from their CENVAT credit account, which is also available for taking further CENVAT credit by the buyer, no further duty payment is required to be made through PLA/cash. Further, since the adjudged demands are liable to be set aside on the ground of non-sustainability of extended period of limitation, and that normal period of demand is not covered in the SCN, there is no fresh duty payment involved for such goods. Accordingly, the impugned order is set aside and the appeal is allowed
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