TaxTMI 
TaxTMI 
2008 (11) TMI 604
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....t from 1-4-2000, new Cenvat Credit Rules were introduced. As a result of budgetary changes in respect of duty structure on the yarn and in textile industry in general, the availability of CENVAT credit of duty paid on inputs used in the manufacture of texturised yarn was also effected in terms of the said rules, which is the subject matter of dispute. 3. After hearing both the sides duly represented by Shri W. Christian, ld. Advocate for the appellants and Shri Sameer Chitkara, ld. SDR for the Revenue, we find that the dispute revolves around two rules i.e. Rule 57AB(2)(c) and Rule 57AG(3)(a). As per Rule 57AG(3)(a), the independent texturisers, who had availed the credit of duty prior to 1-4-2000, were required to reverse the credit involved in respect of the inputs lying in stock or used in the manufacture of texturised yarn lying in stock as on the first day of March, 2000 or thereafter. For better appreciation, we produce the said relevant rule. "57AG(3)(a). An independent texturiser who has availed of the credit of duty paid on inputs used for manufacture of texturised yarn (including draw-twisted or draw-wound yarn) of polyesters falling under heading No. 54.02 of the s....
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....ested before the Tribunal inasmuch as Tribunal being a creature of the Act is bound by the provisions of the rules enacted. The same being in the realm of legislation and the applicability of the same being not contested by the appellant, we confirm the demand of duty of Rs. 3,36,16,518/- against the appellant. 5. Further as per the provisions of Rule 57AB(2)(c), CENVAT credit of duty paid on the inputs is not allowed in respect of texturised yarn of polyester falling under Heading No. 54.04 manufactured by an independent texturiser, who does not have the facility in his factory for manufacture of partially oriented yarn of polyester. Admittedly, the appellants have not availed any CENVAT credit in terms of the said rule after 1-4-2000. The said rule stands pressed into service by the Commissioner for denying the appellant the use of the excess credit which remain in balance after the reversal of the amount of credit in respect of inputs/finished products lying in stock as on 1-3-2000. To make it more clear, the credit in the CENVAT account was much more than the credit involved in respect of the inputs/finished goods lying in stock as on 1-3-2000. As such, even after reversal o....
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....otification. It is seen that the condition attached to the availability of the said notification is only to the effect that no modvat credit is taken. There is no violation of said condition. There is no further requirement in the Notification requiring the assessee to pay duty out of PLA or in cash and not by utilizing the credit accumulated with the appellant (admittedly not earned out of the inputs used in the manufacture of such final product). In the absence of any such condition in the notification, the introduction of the same by the Adjudicating Authority was not legal and warranted. Pressing into service the legislative intent by the Adjudicating Authority, for the purposes of denial of use of such excess credit for payment of duty in terms of Notification No. 6/2000-C.E. was not called for inasmuch as it is well settled law that in the absence of any ambiguity in the language of the notification, the same has to be interpreted on the basis of the plain words used by it. There is nothing in the notification to suggest payment of duty out of cash or PLA. We accordingly answer the above disputed issue in favour of the assessee. 7. We also agree with the ld. Advocate that ....
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.... be utilized in respect of texturised yarn after 1-4-2000, the date on which this rule came into force. It is important to note that what has been specified in this case is the final product and not the inputs. While the credit of duty paid on the inputs can be taken or not is a question of interpretation of other rules, this Rule is concerned only with utilization of credit and this Rule specifically bars a manufacturer engaged in the manufacture of texturised yarn but who does not have the facility of manufacture of partially oriented yarn of polyesters from utilizing the Cenvat credit. It is to be noted that Rule does not talk of the date on which credit has been taken on the inputs. What is disallowed under this Rule is the credit of the duty paid on the inputs whether it is available or whether it has been taken subsequently. On the basis of this interpretation, the situation as regards the payment of duty on texturised yarn would be as under : (i) An assessee who is engaged in the manufacture of texturised yarn but does not have the facility to manufacture partially oriented yarn of polyesters falling under sub-heading No. 5402.42 shall not be entit....
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....re being a conflict of views between the two learned Members of the regular Bench, I have been called upon to consider the relevant issue as Third Member. The facts of the case have already been stated by learned Member (Judicial) in her order and I would not like to reiterate the same. The entire dispute in this case pertains to two products viz. draw twisted polyester yarn (SH 5402.52 of the First Schedule to the Central Excise Tariff Act) and draw wound polyester filament yarn (SH 5402.43) manufactured and cleared by the appellants during the material period. There is no classification dispute. It is also not in dispute that both the said products are texturised yarns or that the appellants are "independent texturisers" within the meaning of this expression found in various rules which were added to the body of the Central Excise Rules, 1944 with effect from 1-4-2000 under Notification No. 27/2000-C.E. (N.T.) and have been referred to by both sides extensively before the regular Bench. One of the rules brought into force under the above notification was Rule 57AB which conferred on manufacturers of final products the right to take CENVAT credit on inputs or capital goods receive....
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....ant inasmuch as the issue placed before me on account of difference of opinion is whether it was open to the appellants, during the material period, to utilise CENVAT credit of the duty paid on inputs [partially oriented yarn (POY) of polyester] which had been used in the manufacture of the final product and hence not physically available in stock as such or as part of finished goods on 1-3-2000 for payment of duty on the final product from 1-4-2000. I am told that there is no dispute with regard to the availment or utilisation of the credit of duty paid on inputs which were available in stock as such or as part of finished goods on 1-3-2000. The learned Member (Judicial) of the regular Bench held that the input duty credit which pre-existed (that is to say, the credit of duty availed on inputs used in the manufacture of final product cleared prior to 1-3-2000) did not lapse and hence could be utilised by the assessee for payment of duty on their final product on or after 1-4-2000, unaffected by anything contained in the aforesaid rules. The learned counsel has argued in support of this view relying on the Apex Court's decision in Eicher Motors Ltd. v. Union of India [1999 (81) E.C....
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....od was there any provision for any such credit to lapse in any factual situation whatsoever. In this manner, the learned counsel has prayed for concurring with the view taken by the learned Member (Judicial) of the regular Bench. 15. I have found a valid point in the arguments of the learned counsel which flows from the basic legal principle, since well settled, that an exemption notification issued under Section 5A of the Central Excise Act to provide for total or partial exemption from payment of duty on final product requires to be interpreted strictly on its own terms. In the present case, the Revenue appears to have allowed interplay between the provisions of Notification No. 6/2000-C.E. ibid and certain provisions of the Central Excise Rules, 1944. This is clearly impermissible as rightly held by the learned Member (Judicial) of the regular Bench. It is nobody's case that the appellants are not entitled to the benefit of concessional rate of duty in terms of S. No. 114 of Notification No. 6/2000-C.E. ibid. In other words, there is consensus that the conditions attached to the benefit were fulfilled by the party. Accordingly, they paid duty at concessional rate on texturise....