Tribunal upholds deemed credit demand against Blue Blend Ltd; grants reduced penalty payment option.

The Tribunal upheld the demand and recovery of deemed credit against M/s Blue Blend Ltd but granted the appellant the option of paying a reduced penalty within 30 days in accordance with statutory provisions. The appeal was partly allowed on these terms.

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Issues:
- Eligibility for deemed credit under Notification No. 6/2002-CE(NT)
- Interpretation of Para 4 of the Notification
- Applicability of the Tribunal decision in a similar case

Eligibility for Deemed Credit:
The appellant, M/s Blue Blend Ltd, appealed against the Order in Original confirming the demand and recovery of deemed credit along with penalties. The appellant argued that they were eligible for deemed credit at a lesser rate and should have received a refund instead of facing recovery. The Ld Advocate highlighted that the appellant's factory was not a composite mill, making them eligible for deemed credit at a prescribed rate for non-composite mills. However, the Revenue authorities upheld the demand for deemed credit.

Interpretation of Para 4 of the Notification:
The issue revolved around the interpretation of Para 4 of Notification No. 6/2002-CE(NT) regarding the eligibility for deemed credit. The Ld AR for the Revenue contended that the facility of deemed credit was not available to the appellant as they were availing Cenvat Credit under Rule 3 of the Cenvat Credit Rules 2002. The Tribunal carefully considered the provisions of Para 4, which clearly stated that the Notification did not apply to a manufacturer (other than a composite mill) availing credit under Rule 3 of the Cenvat Credit Rules 2002. Consequently, the Tribunal found no merit in the appellant's appeal.

Applicability of Tribunal Decision:
The appellant relied on a Tribunal decision in a similar case, CCE, Ahmedabad vs Blue Blends India Ltd - 2003(159)ELT.36 (Tri. Del.), to support their argument. However, the Tribunal deemed this case law irrelevant to the present matter. Despite this, during the hearing, the Ld Advocate highlighted that the appellant was not given the option of paying a 25% penalty as provided by the Central Excise Act, 1944. Hence, the Tribunal granted the appellant the option of paying the penalty within 30 days of the order.

In conclusion, the Tribunal upheld the impugned order regarding the demand and recovery of deemed credit but modified the penalty aspect, allowing the appellant the option of paying a reduced penalty in line with the statutory provisions. The appeal was partly allowed on these terms.

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