TaxTMI 
TaxTMI 
2010 (8) TMI 388
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....5% ad valorem. This exemption notification, however, was subject to certain conditions as mentioned in para 2 of the Notification. While condition No. (iv) of this notification was that the manufacturer shall not avail the credit of duty under Rule 57A or 57B of Central Excise Rules paid on inputs used in the manufacture of specified goods for home consumption, the aggregate value of first clearances of which does not exceeds Rs. 100 lakhs, as calculated in the manner specified in the said table, the condition No. (v) prescribed that the manufacturer also does not utilize the credit of duty under Rule 57Q of Central Excise Rules paid on capital goods, for payment of duty, if any, on the aforesaid clearances, the aggregate value of first clearances of which does not exceed Rs. 100 lakhs, as calculated in the manner specified in the said table. In other words, the manufacturer availing of the benefit of this notification in respect of first clearances upto Rs. one crore in a financial year was prohibited from availing the input duty credit in respect of the duty paid inputs used and was also prohibited from utilization of capital goods credit towards payment of duty on the finished p....
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....Department's appeal. It is against this order of the Commissioner (Appeals) that the present appeal has been filed by the Revenue. 2. None appeared for the respondent. 2.1 Heard learned DR. Shri R.K. Verma, assailed the impugned order by reiterating the grounds of appeal and pleaded that one of the conditions for availing the exemption under Notification No. 8/99-C.E. is that the manufacturer does not utilize capital goods Cenvat credit for payment of duty on the clearances of the specified goods; that there is no dispute about the fact that this condition has been violated as the respondent used capital goods Cenvat credit amounting to Rs. 1228/- for payment of duty on a consignment cleared on 25-5-99; that it is settled law that exemption Notification has to be strictly construed and if the exemption notification is available subject to certain conditions, non fulfilment of those conditions would disentitle the assessee to the exemption and that Addl. Commissioner's order as well as the Commissioner (Appeals)'s order upholding the same, are not correct. Shri Verma also pleaded that the judgment of Tribunal in the case of Bharat Earth Movers Ltd. v CCE, Bangalore reported i....
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....ntral Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table. TABLE S.No. Value of clearances Rate of duty (1) (2) (3) 1. First clearances upto an aggregate value not exceeding Fifty lakh rupees made on or after the 1st day of April in any financial year Nil 2. Clearances upto an aggregate value not exceeding fifty Lakh rupees immediately following the clearances specified against S. No. 1 above during the financial year Five per cent ad valorem 3. All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods Nil 2. The exemption contained in this notification shall apply only subject to the following conditions, namely :- (i) a manufacturer who intends to avail the exemption under this notification shall exercise his option in writing for availing the exemption under this notification before effecting the first clearances under this notification and such option shall be effective from the date of exercise of the option. Such option s....
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....onal clearances of an aggregate value of rupees thirty lakhs and further clearances of an aggregate value of rupees fifty lakhs at the concessional rate of five per cent ad valorem. Illustration II : A manufacturer who has been paying the normal duty on any goods during a financial year opts to avail of this exemption after making clearances having an aggregate value of rupees seventy lakhs. He is entitled under this notification to additional clearances of an aggregate value of rupees thirty lakhs at the concessional rate of five per cent ad valorem. (iii) While exercising the option under condition (i) or (ii), the manufacturer shall inform in writing to the Assistant Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following particulars, namely :- (a) name and address of the manufacturer, (b) location/locations of factory/factories; (c) description of specified goods produced; (d) date from which option under this notification has been exercised (e) aggregate value of clearances of spec....
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....es starting from 1st April and upto Rs. 50 lakhs are fully exempt from duty and the next clearances worth Rs. 50 lakhs attract duty at a concessional rate of 5% ad valorem. However, this exemption is available subject to the conditions mentioned in para 2 and condition No. (v) of this Notification is that the manufacturer does not utilize the capital goods Cenvat credit for payment of duty in respect of his clearances upto Rs. one crore in respect of which the benefit of exemption is being availed. There is no dispute about the fact that only on one occasion i.e. on 26-5-99, the respondent used capital goods Cenvat credit of Rs. 1228/- for payment of duty on a consignment cleared under Invoice No. 52 dated 25-5-99 and thereby therefore, violated the condition of the notification. According to the Additional Commissioner and the Commissioner (Appeals), exemption can be denied only in respect of the consignment covered under Invoice No. 52 dated 25-5-99 in respect of which duty amounting to Rs. 1228/- had been paid through Cenvat credit and that in respect of the remaining clearances, the exemption cannot be denied. We do not agree with this view, as, if this interpretation is accept....