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2013 (3) TMI 599
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....ted 26-10-2010 2. 198/76/2011-RA 480/2010, dated 27-10-2010 2. Brief facts in respect of case revision Application No. 198/75/2011-RA (Order-in-Appeal No. 498/2010). The respondents have exported Grey Knitted Fabrics on payment of duty under claim for rebate in terms of Rule 18 of Central Excise Rules, 2002 and filed rebate claim on 3-9-2007 for a sum of Rs. 2,78,334/- being duty paid on Cotton Grey Knitted Fabrics cleared vide ARE 1 No. 1/07-08 and 2/07-08 both dated 26-7-2007 and 3/07-08 dated 31-7-2007. Of this sum of Rs. 2,78,334/-, an amount of Rs. 2,75,632/- (BED Rs. 2,70,228/- plus Rs. 5,404/- Edu Cess) was paid from Cenvat credit account in terms of Cenvat Credit Rules, 2004 and an amount of Rs. 2,702/- Secondary and Higher Education Cess was paid in cash through Personal Ledger Account. On scrutiny of the rebate claim dated 3-9-2007, a sum of Rs. 2,76,847/- was sanctioned vide O-I-O dated 27-12-2007 in cash and the balance amount of Rs. 1,487/-, being the duty paid on the value difference between FOB Value and ARE-1 Value, was allowed as re-credit into Cenvat credit account. However the above sanction order was reviewed by the department as th....
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....the provisions of the Cenvat Credit Rules, 2002. Initially, the respondents have availed the concessional rate of duty for the textile and textiles articles manufactured by them vide Notification No. 29/2004 C.E., upto 31-12-2004 and have availed Cenvat credit on inputs used in the' manufacture of the finished goods. However, then the respondents have started availing exemption provided vide Notifications No. 29/2004-C.E. and 30/2004-C.E. simultaneously in respect of Cotton Yarn and have started availing full exemption vide Notification No. 30/2004-C.E. in respect of all other textile and textile articles other than cotton yarn manufactured by them. The respondents have also chosen to pay duty on Knitted Fabrics vide Notification No. 29/2004-C.E. from July, 2005 to 18-11-2005, and again under full exemption from 19-11-2005 onwards and then again reverted back to clear the Knitted Fabrics on payment of duty from 24-7-2007 onwards. The respondents have a Cenvat credit of Rs. 1,18,01,702/- [including BED, AED (T&T), AED (GSI) and EC] as on 31-12-2004. Reversal of credit lying in stock as on 1-1-2005 is Rs. 12,80,848/- [including BED, AED (T&T), AED (GSI) and EC] and hence the Cenvat c....
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.... the refund of Rs. 67,10,159/-. In view of the above, the lower authority vide its impugned Order-in-Original No. 14/2009-C.E. (Refund), dated 21-7-2009 has restricted the rebate claim to the extent of Rs. 1,71,154/- which is paid in cash through PLA and has rejected the balance amount of Rs. 65,38,645/- inasmuch as the respondents have paid the excise duty from out of ineligible Cenvat credit and without availing the full exemption granted absolutely in terms of Notification No. 30/2004-C.E., dated 9-7-2004. 3. Being aggrieved by the said orders-in-original, respondents filed appeal before Commissioner (Appeal), who set aside the impugned orders-in-original and allowed the appeal. 4. Being aggrieved by the impugned order-in-appeal, the applicant department has filed these revision applications under Section 35EE of Central Excise Act, 1944 before Central Government on the following common grounds: 4.1 The insertion made to Rule 11 of CCR, 2004 by Notification No. 10/2007-C.E. (N.T) reads as below. "(3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of ....
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....le, existence of any one of the circumstances is enough. 4.2 It appears that Commissioner (Appeals) has given a different interpretation as the clause "after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported" appear along with the second circumstance though there is a 'comma' and an 'and' appearing after the second circumstance. It may be noted that the main clause of the sub-rule requiring the manufacturer to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock is governed by the conditional clause that "if (i) he opts for exemption from whole of the duty of excise leviable on the sold final product manufactured or produced by him under a not....
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....n stock or in process or is contained in the final product lying in stock when a manufacturer opts for availing exemption under a notification issued under Section 5A. The reason for such a requirement is that credit is allowed on the inputs only if the final products are dutiable. When the assessee opts for exemption then all the credit taken on inputs lying in stock or in process or contained in the final products will be used in exempted final product and therefore the assessee would not be eligible for the credit taken on such inputs. However, if the credits taken on such inputs had already been utilized then, the sub-rule ibid requires payment of amount equivalent to the credit taken. There may be cases where the credit balance in the Cenvat account may exceed the amount of credit to be paid as per the sub-rule. In such cases, the rule automatically lapses the balance credit by the second dictum by placing it after the two circumstances. If the interpretation given by the Commissioner (Appeals) is accepted then only those manufacturers who opt for unconditional exemption alone would be required to lapse the credit, which would defeat the intention of the notification. 5.&em....
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....., reported in 2001 (130) E.L.T. 405 (S.C.). Similarly, in the case of C.C. v. Hindustan Motors Ltd., reported in 1998 (98) E.L.T. 557 (T) the Hon'ble Tribunal had held that, "simultaneous benefit of more than one notification can be availed unless there is a prohibition to the contrary". Similarly, in the case of C.C.E. v. Bharat Metal Industries, reported in 1999 (105) E.L.T. 494 (T), it had been held that, "When there are two concurrent exemption notifications in force, it is necessary to give effect to the both harmoniously construe them for this end. It is also necessary to be given effect to the notification which is more beneficial to the assessee. We submit that, the Hon'ble CESTAT, Bangalore in the case of Forbes Gokak Mills Limited v. C.C.E., Belgaum, reported in 2006 (77) RLT 626 (CESTAT-Bang.) = 2007 (208) E.L.T. 521 (T) = 2008 (10) S.T.R. 540 (T) has confirmed in an issue regarding availment of Cenvat credit that, the textile manufacturers can go for the Notifications 29/2004 and 30/2004 simultaneously. 5.4 We submit that, in the Rule 18 of Central Excise Rules, 2002 there is no such stipulation that the assessee who pays duty for the clearances for home consum....
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....id on their inputs used in the exported goods. Instead they had utilized only the accumulated credit earned prior to 2005 for payment of duty for the export goods. For the above mentioned reasons, their claims should not be rejected as devoid of merits and for the reasons stated in the show cause. 6. Personal hearing was scheduled in this case on 8-10-2012 and 13-12-2012. Shri V. Sankaran, Supdt. of Central Excise, Sattur Range, Madurai Commissionerate appeared on behalf of the applicant who reiterated the ground of revision application. Shri S. Murugappam, Advocate and Shri K. Lakshman Shankar, AGM appeared on behalf of respondents who reiterated the submission made in counter reply as stated at para 5 above and submitted that the orders-in-appeal being legal and proper may be upheld. 7. Government has carefully gone through the relevant case records and perused the impugned orders-in-original and orders-in-appeal. 8. In these cases, original authority had held that Cenvat credit balance carried forward in their Cenvat accounts all through the period lapsed after insertion of sub-rule (3) of Rule 11 of Cenvat Credit Rules, 2004 w.e.f. 1-3-2007 since assesse....