Pradeep Jain - Chartered Accountant

Case: - Lenovo (India) Pvt Ltd v/s CCE (Appeals-II), ST, Bangalore

Citation: - 2009 (93) RLT 117 (CESTAT-Ban.)

Issue: - Whether appellant has rendered any service to a person located outside India during the period April 2005 to March 2006.

Brief Facts: - The appellant had received commissions for the business auxiliary services provided by them to M/s Lenovo Singapore Pte Ltd., Singapore for the period April-March 2006. The appellant claimed rebate of service tax paid on the commissions received from the foreign company in terms of Rule 5 of the Export of Services Rules, 2005. Department issued show cause notice proposing to deny the rebate claim on the ground that the said service were rendered in India and therefore, did not amount to export of services. The Adjudicating Authority rejected the rebate claim by holding that the BAS service was rendered by the appellant by way of promoting sale of the products of M/s Lenovo, Singapore in India and as such exemption under Export of Services Rules is not applicable. The appeal filed by the appellant was also rejected by the Commissioner (Appeals). Therefore, appellant has filed this appeal.

Appellant’s Contention: - Appellant has contended that at the relevant period the business auxiliary service rendered by them qualified as export of service because the recipient of the said service was located outside India. The recipient did not have an office in India. Therefore, the test of the service being delivered outside India and used outside India as per rule 3 (3) (i) of the Export of Services Rules, 2005 cannot be applied. That the payment for the services is received in foreign exchange and a chartered accountant’s certificate has been filed.

The appellant also relied upon the decisions given in the case of Blue Star Ltd. v/s CCE, Bangalore [2008 (86) RLT 671 (CESTAT-Ban.)] and ABS Ltd. v/s CCE, Bangalore [2008 (88) RLT 969 (CESTAT-Bang.)].

Respondent’s Contention: - The respondent contended that the services rendered by the appellant is to their own concern i.e. Lenova, Singapore. The appellant’s office in India is to be considered as office of recipient of service; hence, the recipient is not located outside India as per provisions of Rule 3 of the said Rules.

Reasoning of Judgment: - The findings of the lower authorities are not acceptable. During the relevant period the provision of Rule 3 (1) of the said Rules prescribed conditions required to be fulfilled for treating the services as export. One such condition was that the services provided services of procurement of order and forwarding the same to their principal in Singapore.

The Tribunal has cited the case of ABS India Ltd in which it was held that the recipient of the service is a Singapore Company. When the recipient of the service is a foreign company, it cannot be said that service is delivered in India and the benefit of the service is derived only by the recipient company. If the orders are booked the foreign company gets business. Therefore, the service is also utilised abroad. The service rendered is indeed a service which has been exported in terms of Rule 3 (2) of the Export of Service Rules. Therefore, the appellant is not required to pay service tax.

The Tribunal held that the facts of the present case are similar to the facts of the case of ABS India Ltd and therefore, the issue raised herein is squarely covered by the said judgment. Therefore, impugned orders are set aside.

Decision: - Appeal allowed with consequential relief.

Case: - CCE, Chandigarh v/s Sood Packagers & Ors

Citation: - 2009 (93) RLT 55 (CESTAT-Del.)

Issue: - The used capital goods were removed for re-engraving on jobwork basis and duty was paid by Jobworker, whether the principal manufacturer is entitled to second time take Cenvat credit on the said goods?

Brief Facts: - The respondent is a manufacturer of printer bags/ printed films/ poly bags and pouches. They received printing cylinders and took Cenvat credit as capital goods. The said cylinders have become unusable after use. The respondent has sent such cylinders for engraving, re-chroming, re-engraving to the job-workers. The job-workers after completing their work, paid duty on the value of base shell and the job charges received for such re-chroming, re-engraving done by them by treating the activity as manufacture. The respondent has taken Cenvat credit of the re-engraved cylinders when receiving the said goods back in their factory.

The original authority held that the capital goods have not been cleared under Rule 3 (4) for the purpose of jobwork. Therefore, their taking credit when the reconditioned printing cylinders came back paying duty for second time is incorrect.

In further appeal, the Commissioner (A) set aside the order of original authority and gave the finding that the original authority has denied credit on the ground that the respondent has not reversed the Cenvat credit while sending the said cylinders for jobwork. The appellant has contended that after use only the base shell remains which requires engraving/ re-chroming and rengraving which amounts to manufacture of a new product. The said new product was sent to the respondent after payment of duty under proper invoice. Since the printing cylinders are considered as capital goods, accepted by the Department also, the respondents (appellant therein) are very much entitled for taking Cenvat credit. Moreover, under Rule 7 of the Cenvat Credit Rules, the respondents (appellant therein) is entitled for Cenvat credit.

Department has come in appeal before the Tribunal against the said decision.

Appellant’s Contention: - The contention raised was that second time credit taken by respondent was not in order. The cylinders should be treated as cleared as such in terms of Rule 3 (5) of Cenvat Credit Rules and they ought to have reversed the credit taken on the said cylinders originally taken by them. They have placed reliance on the decision of Larger bench given in case of Moderova Plastyles Pvt. Ltd v/s CCE, Raigad [2008 (89) 214 (CESTAT-LB)].

Respondent’s Contention: - They have contended that they were entitled to remove the said used cylinders under Rule 4 (5) (a) under challan for re-engraving, re-chroming and get it back for further use in their factory. In such a situation, the question to reverse the credit at the time of removing used cylinders for jobwork does not arise. Even if Cenvat credit was reversed, it was available to the job workers for paying duty towards excise duty at their end. The jobwork done on the used cylinders amounted to manufacturing activity and taking credit on the duty paid on such activity was in order.

Reasoning of the Judgment: - The Tribunal held that the contention cannot be accepted that the capital goods were removed as such and therefore, invocation of Rule 3 (5) which applies to removal of capital goods as such does not arise. Also there was no demand of Cenvat credit which was not reversed at the time of clearance of capital goods from the premises of the respondents. There is nothing irregular in availing Cenvat credit by the respondents as the jobworker had paid duty while clearing the re-conditioned printing cylinders which have been received back by respondents for further use.

The decision cited by respondents is not applicable as the said case is applicable were capital goods as such were sent to the job worker. In the present case, the cylinders were sent after use and if they were not sent for reconditioning, the goods should have been scraped.

Even if there was reversal of Cenvat credit, the same was available to the jobworker as credit. On the whole the said case is of revenue neutrality.

Decision: - No infirmity in the order of Commissioner (Appeals). Appeals rejected.

Case: - Jai Jagdish Ship Breakers P. Ltd. v/s CC, Jamnagar

Citation: - 2009 (93) RLT 67 (CESTAT-Ahmd.)

Issue: Interest is payable from the date of order or from the date of filing of refund claim

Brief Facts: - Appellants imported a vessel on the basis of provisional assessment and for which they had furnished a bank guarantee. The provisional assessment was converted into final assessment and differential duty was confirmed. The Department encashed the bank guarantee towards adjustment of differential duty. Appellant challenged the final assessment order in appeal which was rejected. In further appeal, the Tribunal allowed the appeal of the appellant vide order dated 26.08.04.

Appellant approached the jurisdictional Assistant Commissioner on 01.1104 for returning the amount.

However, department issued show cause notice to the appellant on the ground of unjust enrichment. The original authority passed an order depositing the amount in Consumer Welfare fund vide its order dated 26.12.05. On appeal, the Commissioner (Appeals) remanded the matter vide order dated 24.04.06, with the direction to examine whether the amount was deposited in terms of Board Circular dated 02.01.02.

In de-novo proceedings, refund was sanctioned but deposited to Consumer Welfare fund vide OIO dated 14.09.06. Appellants challenged the OIO dated 14.09.06. The Commissioner set aside the said OIO and directed the appellant to file refund application and remanded the matter to adjudicating authority for de-novo consideration with direction to examine as to how the disputed amount has been accounted for in Books of Accounts and to sanction refund claim as per law. The Department challenged the said order before the Tribunal. Appeal was rejected by order dated 17.05.07.

In pursuance of the said order rejecting the appeal and the order dated 24.01.07, the Assistant Commissioner passed an order sanctioning the refund to the appellant.

But no interest was granted by the Assistant Commissioner on the ground that the refund application filed on 13.03.07 in pursuance of Commissioner (Appeals)’s order dated 24.01.07 and the refund was granted within 3 months from the date of filing refund application.

The OIO passed on the ground of interest was challenged before the Commissioner (Appeals). The Commissioner (Appeals) allowed the appeal vide order dated 25.10.07 by way of remand to Assistant Commissioner to examine and decide the issue of interest in view of various decisions of the Tribunal. The Assistant Commissioner passed OIO dated 19.02.08 holding that no interest was payable. The said order was confirmed in further appeal before Commissioner (Appeals) by order dated 03.06.08.

Reasoning of the Judgment: - The Tribunal found that apart from the fact that the OIO dated 24.01.07 was challenged by Revenue before Tribunal and cross objections were filed by the assessee and Tribunal’s order dated 04.05.07 rejecting the appeal filed by the Revenue, the said order can be safely held to have been merged with the Tribunal’s order, the basic dispute about the assessment was finalized by Tribunal vide its order dated 26.08.04 in favour of the assessee. Therefore, the refund of pre-deposit made by the assessee should have been allowed suo-moto by the Revenue within a period of 3 months from the passing of the said order. There was admittedly no appeal against Tribunal’s order and as such, the same was required to be implemented. Instead, litigation was started again by the Revenue. The interest was ultimately allowed only on 14.05.07.

The order of Commissioner (Appeals) dated 24.01.07 was with a basic purpose of verifying the accounts maintained by the appellants as recorded in Tribunal’s order and there was no need for filing the refund claim application. As such, non-challenge of the said order, which was, in essence, in favour of the assessee, cannot be made the basis for holding against them.

Decision: - Impugned order set aside. Appeal allowed with direction to Revenue to calculate interest amount within 3 months from the date of passing of Tribunal’s order on 26.08.04 till date of payment of refund to the appellant.

Case: - Sterlite Technologies Ltd. v/s CCE & C, Vapi

Citation: - 2009 (93) RLT 50 (CESTAT-Ahmd.)

Issue: - Whether the benefit of notification 108/95 is available to a manufacturer or to the units of a manufacturer.

Brief Facts: - Appellants are engaged in manufacture of Optical Fibres, Telecommunication Cables and Power Transmission Conductors. They have 2 units one in Silvassa and other at Karanjware, Pune. Appellants were granted a contract for supply of Aluminium Alloy Conductors for a project funded by the Asian Development Bank. The said supply was exempted in terms of Notification No. 108/95-CE, dated 28.05.95. One of the conditions for claiming exemption is that the assessee has to produce a certificate from the executive head of the Project Implementing Authority which is countersigned by an officer not below the rank of a Joint Secretary to the Government of India, certifying that the said goods are required for the execution of the said project and which has been duly approved by the Govt. of India. The appellant had satisfied the said condition.

As per the said certificates, the goods were required to be supplied by the appellant to the extent of 50% from the Silvassa unit and 50% from Karanjware unit. But the appellant has supplied the whole goods from their Silvassa unit. The Department contended that the 50% of the balanced goods which were supplied from the Silvassa unit has to be considered as in excess of the order placed upon them and they were disentitled from the benefit of Notification No. 108/95-CE. The adjudicating authority accepted the said contention of Department and passed the impugned order. The appeal against that order has reached the Tribunal.

Appellant’s Contention: - It is submitted that the original certificate issued by the authorities was submitted to the jurisdictional Central Excise Authorities at Silvassa, the same could not be produced before the Central Excise Authorities at Karanjware unit and as such they approached their customer for amendment of the order in as much as in the absence of the original certificate Karanjware unit was not in a position to avail the benefit of the Notification. They had submitted that the Karanjware unit has not cleared any goods against the said certificate and 100% supply has been made by Silvassa unit. But the said pleading was not accepted by the Commissioner who has passed the impugned order.

Reasoning of the Judgment: - The Tribunal held that as both the units belong to same person, the certificate must be considered in the name of the manufacturer i.e. the appellant. Admittedly the Karanjware unit had not supplied any goods against the said certificate, and the order was subsequently modified by the appellant’s customer showing that the entire goods are to be cleared from their Silvassa unit. The Tribunal noted that the said Notification grants exemption to the manufacturer and not to different units. It is not mentioned anywhere in the Notification that separate certificates are required to be produced in respect of different units of the same manufacturer. As such, the certificate issued to a manufacturer would entitle him to clear the goods from different units or from one unit.

The reasoning of the Commissioner that order was placed on 2 different units (which in any case was amended later on) though they belonged to the same manufacturer, is without any merit. The benefit of the Notification is available to the appellant as he has cleared the goods in accordance with the order granted to him.

Decision: - Impugned order set aside. Appeal allowed with consequential relief.

Case: - Commissioner of Central Excise, Chennai-III v/s Greaves Cotton Ltd.

Citation: - 2009 (239) E.L.T. 137 (Tri. - Chennai)

Issue: - Cenvat Credit of Service Tax paid on Mobile and Landline Phone even if installed at the residence of managers, whether admissible or not.

Brief Facts: - The respondent had availed Cenvat credit of Service Tax paid on Mobile Phones and Landline phones which were installed at their Manager’s Residence during the year 2005. The Department contended that credit was not admissible as the phones were not installed in the factory premises. The adjudicating authority confirmed the demand raised by the department. Appeal was filed by the respondent.

The Commissioner (Appeals) set aside the impugned OIO by relying on the decision given in case of Indian Rayon & Industries Ltd v/s CCE, Bhavnagar [2006 (4) S.T.R. 79 (Tri.-Mum.)]. In the said case relied upon it was held that Cenvat Credit Rules, 2004 applicable during the material time did not require specifically that the telephones installed in the premises of the service provider to be eligible for such credit. The Commissioner (A) gave finding that in the case of input service there was no stipulation that the telephone should be installed in the factory of the manufacturer or in the premises of the provider of output service to avail the credit of the same. Rule 4 (7) of the said Rules provided that Cenvat credit in respect of input service would be allowed on or after the date on which payment was made for the value of input service and the service tax paid was indicated in the invoices, bills or challans.

Department has come in appeal against the said order.

Appellant’s Contention: - Revenue has contended that as per Board’s Circular No. 59/8/2003-ST dated 20.06.03, credit could be allowed only in respect of telephones installed in business premises and not in respect of phones not installed in the factory including mobile phones.

Respondent’s Contention: - The respondents relied on the decision of the Tribunal in the Indian Rayon & Industries Ltd. in support of the claim that the impugned credit was admissible. Cenvat Credit Rule, 2004 did not prohibit availment of such credit in as much as the said phones were used for providing output service or were used in or in relation to the manufacture of the final products.

Reasoning of Judgment: - The Tribunal has relied upon the judgment delivered in the case of Commissioner of Central Excise v/s Excel Crop Care Ltd. [2008 (12) S.T.R. 436 (Guj.) in which the High Court of Gujarat has held that the fact that the phones were not installed in the factory premises was not aground germane to the provisions of the relevant rules.

The Tribunal held that the finding of the High Court is equally applicable to the credit in respect of landline phones. Accordingly, in the present case since there is no contrary finding by the lower authorities, it has to be held that telephone service in relation to the phones involved is covered by the definition of input service contained in the CCR, 2004 in view of the Tribunal’s Order and the judgment of the High Court referred. It is held that impunged credit was admissible to the respondents.

Decision: - Appeal filed by the Revenue dismissed.

Case: - Thangavelu Spinning Mills Ltd. V/S. Commissioner of C. Ex., Salem

Citation: - 2009 (239) E.L.T. 461 (Tri. Chennai)

Issue: - Cenvat credit availed on invoice issued in name of another party, whether admissible.

Brief Facts: - Appellant had availed input credit against an invoice which was in name of its sister unit and not in their name. When the mistake was found, the appellant reversed the credit availed. The Appellant had furnished a copy of details of transaction recorded in prescribed register along with monthly return. The Original Authority after 3 years of transaction demanded credit along with interest and penalty. The Commissioner (Appeals) affirmed the order. Hence the appellant has come in appeal against the said order.

Appellant’s Contention: - The appellant argued that the supplier of goods entered sister unit’s name on invoice by mistake. The inputs were intended for the appellants. They had received the inputs, taken credit, manufactured final goods and cleared them on payment of duty. The Department had initiated proceedings after about 3 years of their availing credit. The details of invoice were entered in their inputs register. Their records were open to inspection by the audit parties of the Department. The intention of appellant was bonafide as they reversed the credit availed themselves. Their bona fides are also indicated from the fact that they have recorded the details of the impugned receipt of inputs and availment of credit in the inputs register. Therefore, the larger period invoked was without justification. They had huge accumulated balance of Cenvat credit and the demand of interest was therefore not justified. As the demand was not sustainable under Section 11A, penalty could not have been validly imposed under Rule 15 read with Section 11AC.

Respondent’s Contention: - The Department contended that it as irregular credit because assessee cannot avail credit against an invoice issued in the name of another party. The department tried to recover irregular credit along with interest and was of the view that penalty also be imposable.

Reasoning of Judgment: -The tribunal held that from the facts of the case it is clear that the appellant had availed input credit contrary to the statutory provisions and the credit availed was irregular. However, from the facts it was clear that the appellants had made a mistake. The appellant had furnished a copy of details of disputed transaction along with monthly return. The department did not take any action to recover irregular credit in time. It is found that but for the said invoice showing name of the sister unit, the appellant were eligible to take Cenvat credit on the said invoice. Finding to the contrary is not substantiated in their orders by the lower authorities. In the circumstances, larger period could not have been validly invoked. The demand of interest and penalty is not sustainable. Impugned order set aside.

Decision: - The appeal is allowed with consequential relief.

Case: - In re: M/s. Patodia Syntex Ltd.

Citation: - 2009(239) E.L.T. 506 (Commr. Appl.)

Issue: - Whether application of refund of unutilized credit of additional excise duty on textile & textile articles is governed by time limitation?

Brief facts: - The appellant had filed an refund application in year 2007 claiming refund of unutilized credit of additional excise duty on textile & textile articles, duty paid on goods exported during year 2003-04. The department had issued SCN and refund claim was rejected on the ground that the said refund claim was time barred in terms of Section 11B of the Central Excise Act, 1944.

Appellant’s Contention: - The appellant has argued that the claim of refund is not subjected to limitation of one year as it is the claim of refund of unutilized credit. In the case of UOI v. Slovak India Trading Co. Pvt. Ltd. [2006 (201) ELT 559 (Kar.)], it was held that in absence of express prohibitory provisions, unutilized credit is admissible as cash refund. Refund of unutilized credit is allowed when it is not possible to utilize such credit. In various judgments like Sanghi Textile Ltd. [2006 (206) ELT 854], Anjani Synthetics Ltd. [2001 (132) ELT 688 (Tri.-Mumbai)] etc. the limitation under section 11B of claiming refund within one year from the date of export does not apply. The appellant asked for refund of unutilized credit, not duty already paid therefore, the refund application should not be rejected.

Respondent’s Contention: - The Department considered the application of refund claim as time barred because one year time has been lapsed after the export of goods. Section 11B clearly states that the refund claim in normal course should be made within one year from the relevant date. Considering the provision they rejected the refund claim.

Reasoning of Judgment: - No relevant date has been given for the refund of credit paid on excisable goods used as inputs, in accordance with the rules made or any notification issued under this Act. Thus, one year period is not applicable to this issue. The appellant is asking refund of unutilized credit, not duty already paid therefore, the refund application should not be rejected on the ground of time bar aspect.

The Tribunal has relied upon the decisions of Sanghi Textiles Ltd. v/s CCE, Hyderabad-III [2006 (206) ELT 854], CCE, Ahmedabad-I v/s Anjani Synthetics Ltd. [2001 (132) ELT 688 (Tri.-Mumbai)] and Camphar Organic (I) Pvt. Ltd. v/s CCE, Mumbai [Order No. C-IV/1241/WZB/03 dated 21.011.03].

Decision: - Impugned OIO set aside. Appeal allowed.

Case: M/s. Erbis Engineering Ltd. V/s. Commissioner of Customs, Chennai

Citation: 2009(239) E.L.T. 493 (Tri. Cheenai)

Issue: - Whether refund of CVD can be granted in absence of proof of passing of duty incidence to customers?

Brief Facts: - The appellant cleared imported goods by paying all the duties leviable. He filed a refund claim for the excess CVD paid. The Original Authority sanctioned the refund & credited the amount to the Consumer Welfare Fund. The Original Authority gave finding that the appellant was unable to prove the aspect of non-passing on of the duty burden to the customer. In further appeal, the Commissioner (A) examined the sales invoice of the appellant and the certificate of CA showing the break up of the sale price. The invoice did not indicate the duty element separately as required under Section 28C of the Customs Act, 1962. The purchase order and the quotation submitted by the importer had not thrown any light on the aspect of passing on of the duty burden to the customer. The balance sheet for the years 1998-99 and 1999-2000 had not shown the impugned amount as ‘receivable’ or in the suspense account. The Commissioner (A) also found that the appellants had not established that the excess duty paid had not been passed on to buyers of the imported goods.

Reasoning of Judgment: - The sales invoice of the appellant does not show the amount of duty included in the sale price. It is reasonable to expect that the appellant who had sold the goods on 28.03.98 would have passed on the import duty paid erroneously. The CA certificate cannot be accepted in the absence of documents relied upon for the figures furnished therein. The appellant- company had not accounted the impugned amount claimed as refund in its balance sheets for the years 98-99 and 99-2000 as ‘receivables’ or deposit with customs. Under the said circumstances, the appellant has not discharged his liability to establish that the amount claimed had not been passed to its buyer.

Decision: - Impugned order is upheld. Appeal dismissed.

Case: - M/s. Tega Industries Limited v/s Commissioner of C. Ex., Kolkata –III

Citation: - 2009(239) E.L.T. 487 (Tri. Kolkata)

Issue: - Whether additional address mentioned on input invoice is a ground for Cenvat denial?

Brief Facts: - The appellant received goods from Pune at Kolkata Head office, then sent the goods to Kalyani factory. Cenvat credit was taken under Rule 57A and material was recorded in Rg 23 A Part-I and A Part-II. Thereafter goods were sent to Hyderabad for processing into liners and the same was received back under a challan prescribed under Rule 57F (3). Initially Cenvat credit was denied and penalty was imposed. On appeal to the Lower Appellate Authority, penalty was waived. On further appeal, Tribunal remanded the matter regarding the admissibility of the credit to the Original Authority who had allowed the credit. On a subsequent appeal by the Department, the Commissioner (Appeals) set aside the order of the Original Authority allowing the credit and has confirmed the earlier order of the original authority inclusive of penalty.

Reasoning of Judgment: - The order of the Lower Appellate Authority cannot be approved nor the appellants can be awarded penalty which was earlier set aside and the Department had not appealed against it.

On the point of admissibility of the credit, a perusal of Rule 57F Challan and the papers of the case including the impugned invoice show that goods which were received from Pune in Kolkata were thereafter sent to Kalyani unit. The additional mention of Hyderabad address on invoice cannot be a ground for denying the credit.

Decision: - Impugned order set aside. Appeal allowed with consequential benefits to appellants.

Case: - Commissioner of Central Excise, Jaipur –II v/s Mohini Process

Citation: 2009(239) E.L.T. 485 (Tri. Delhi)

Issue: - Whether one time Cenvat credit in terms of Rule 9A of the Cenvat Credit Rules, 2002 is admissible in respect of inputs cleared by trader on 01.04.03 and received by the assessee on 01.04.04?

Brief Facts: - The respondent received goods on 1.4.03. They availed the credit on goods treating them as goods lying in stock on 31.3.03. The Department contended that deemed credit is not allowable in the respondent’s case because it is in violation of Rule 9A of Cenvat Credit Rules, 2002. The respondents are eligible for deemed credit on the stock declared as on 31.03.03. The Commissioner (Appeals) allowed the deemed credit on the stock declared as on 01.04.03. The Department has filed an appeal against the said order.

Appellant’s Contention: - The Department submitted that the respondent had availed irregular deemed credit. The deemed credit is to be allowed on the stock declared as on 31.3.03 but not on stock as on 01.04.03, which is contrary to the Rules 9A of Cenvat Credit Rules, 2002. Further, It is submitted that the said fabrics did not attract duty at the time of its removal from the factory so the deemed credit is not allowable to the respondent.

Respondent’s Contention:- The respondent has reiterated the findings of the Commissioner (Appeals). It is submitted that the goods were purchased from the trader as it is evident from the adjudication order. It is also submitted that Board’s Circular F.No. B3/5/2003-TRU dated 30.04.03 has clarified that stocks of inputs as on 01.04.03 would be eligible for deemed credit under Rule 9A in terms of amended Notification No. 40/2003-CE (NT) dated 30.04.03.

Reasoning of Judgment: - The Tribunal has agreed with the finding of the Commissioner (Appeals) that as per the amendment carried out vide Notification No. 40/2003-CE (NT), a manufacturer was entitled for one time credit in respect of the goods lying in stock as on 01.04.03. There was no condition in Rule 9A of the Cenvat Credit Rules that the goods should be dispatched by the supplier on or before 31.03.03. Therefore, as per provisions of Rule 9A, a manufacturer shall be entitled to avail one time credit on the stock held as on 01.04.03 irrespective of the fact when the supplier dispatched the goods. In the present case, appellant (respondent herein) received the goods on 01.04.03 and same were in stock on that date. Accordingly, appellant are entitled to Cenvat credit taken by them.

The Tribunal has also perused the Board Circular dated 30.04.03 in which it has been clarified that the relevant date for eligibility for one time credit under Rule 9A after its amendment will be 01.04.03.

Therefore, there is no reason to interfere with the order of the Commissioner (A). Contention of the Department that disputed fabric was not attracting duty at the time of its removal from the factory of the supplier is not supported by any material. Additionally, it is an admitted position that goods were received by the respondents from trader.

Decision: - Appeal dismissed.

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