Full Judgment
Credit has been disallowed on the ground that it was wrongly availed during the month of April, 2003 by the appellants who are manufacturers of knitted socks, in terms of Rule 9A(2) of the Cenvat Credit Rules, 2002 on the ground that no written declaration of inputs lying in stock or in process or contained in final products lying in stock on the date on which the goods became excisable, had been filed by them and therefore they were covered under Rule 9A(1) which stipulated production of duty paying documents which they could not do for the above mentioned amount.
3. Vide letter dated 1-4-2003, the appellants had furnished a stock statement of finished goods lying in the factory as on 31-3-2003 (knitted socks became dutiable from 1-4-2003). Although during the month of April, 2003 they cleared the goods at concessional rate of duty in terms of Notification 8/2003 dated 1-3-2003 and also availed Cenvat credit, they reversed credit of Rs. 7,155/- taken on inputs lying in stock as on 31-3-2003. On such reversal, the inputs retained the character of duty paid inputs. It is not the case of the department that any amount in excess of Rs. 7,155/- was taken as credit in April, 2003 when the as-sessees were availing of exemption under Notification 8/2003. There is, therefore, no reason why stock statement dated 1-4-2003 cannot be accepted to be the declaration in terms of Rule 9A(2). Since the declaration of stock of finished goods was furnished on 1-4-2003, i.e. on the date when the knitted socks became dutiable, the assessees are covered by the provisions of Rule 9A(2) and are hence entitled to deemed credit and are not governed by the provisions of Rule 9A(1) under which credit is admissible only on production of duty paying documents.
4. In the light of the above discussion, I hold that deemed credit under Rule 9A(2) is admissible to the appellants and hence set aside the impugned order and allow the appeal.