2006 (8) TMI 508

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....from 16-12-1998, i.e. they were required to discharge the duty liability on basis of capacity of production. Appellant was availing the Modvat credit. As per the provisions of the Section 3A and the rules made thereunder, authorities directed the appellant to reverse the credit balance in the books of the appellant in respect of the capital goods and a show cause notice was issued for recovery of such amount. Adjudicating authority confirmed the demand, on an appeal the learned Commissioner (Appeals) directed the appellant to pre-deposit the entire disputed amount. Appellant challenged the said direction in a writ petition, which was allowed by the Hon'ble High Court of Madhya Pradesh and vide its order dated 22-8-2001, directed the learned....

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.... seems, perhaps, from the judgment, that the Hon'ble High Court was not apprised of the fact that the compounded levy scheme was withdrawn by Finance Act, 2001 and in its place a new optional scheme was introduced and the appellant has opted for the said scheme. The Notification 32/2001 being an optional one, had conditions which had to be fulfilled by the appellant. One of the conditions in the notification is at clause no. 5 which reads as under : "5. The independent textile processor opting for the provisions of this notification shall not be eligible to avail of any credit of duty paid on inputs or capital goods under the Cenvat Credit Rules, 2001." 4. It may be noticed that the said clause is very clear and unambiguous ....

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....dgment holds as under :- "The schemes contained in Section 3A(4) of the Act and Rule 96ZO(3) or Rule 96ZP(3) of the Excise Rules are two alternative procedures to be adopted at the option of the assessee. Thus the two procedures do not clash with each other. If the assessee opts for procedure under Rule 96ZO(1) he may opt out of the procedure under Rule 96ZO(3) for a subsequent period and seek the determination of annual capacity of production. An assessee cannot have a hybrid procedure of combining the procedure under Rule 96ZO(1) to which Section 3A(4) of the Act is attracted. The claim by the respondents is a hybrid procedure of taking advantage of the payment of lump sum on the basis of total furnace capacity and not on the basis of ....

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....tion behind the said judgment." 6.  As against these findings the appellant relies upon the decision of the Tribunal in the case of Sagar Twisters v. CCE, Mumbai as reported at 2005 (188) E.L.T. 497 (Tribunal) = 2005-TIOL-574-CESTAT-Mum. It is seen that even the said decision is of not much help to the appellant. Paragraph 4 of the decision in the case of Sagar Twisters (supra) reads as under : "4. We find the above decision is fully applicable to the facts of the instant case. In the present matter, the credit remained unutilized on the records only. The Hon'ble Madras High Court in the case of R.A. Mani v. Palanimuthu Pillai reported in AIR 1967 Madras 16 (V 54 C 7) has observed in Para 6 that the word "avail" is stated to....