2018 (12) TMI 356

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....vided. According to which, he submitted that regarding utilizing, there is only a bar on utilization of NCCD for payment of duty however, there is no bar for utilization of excise duty for payment of NCCD. He placed reliance on the following judgments:- (i) Prag Bosimi Synthetics Limited vs. CCE - 2007 (216) ELT 254 (Tri) (ii) CCE vs. Prag Bosimi Synthetics Limited - 2013 (295) ELT 682 (Gau.) (iii) UOI vs. Kamakhya Cosmetics & Pharmaceutical Pvt. Limited - 2015 (323) ELT 33 (Gau.) (iv) Dharampal Satyapal Limited vs. CCE - 2015 (323) ELT 55 (Gau.) (v) Indian Steel Corporation Limited vs. CCE - 2018 (360) ELT 137 (Tri) (vi) CCE vs. Madura Industries Textiles - 2013 (1) TMI 352 (Guj.) 4. I have carefully considered the submissions made by both sides and perused the record. For availment of credit and utilization, there is a provision made in Rule 3 which is reproduced below:- Rule 3 of Cenvat Credit Rules, 2004 "(1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of - (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the....

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....cturer of final product or by the provider of output services on or after the 10th day of September, 2004, including the said duties, or tax, or cess paid on any input or input service, as the case may be, used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 214/86- Central Excise, dated the 25th March, 1986, published in the Gazette of India vide number G.S.R. 547 (E), dated the 25th March, 1986, and received by the manufacturer for use in, or in relation to, the manufacture of final product, on or after the 10th day of September, 2004. Explanation.- For the removal of doubts it is clarified that the manufacturer of the final products and the provider of output service shall be allowed CENVAT credit of additional duty leviable under section 3 of the Customs Tariff Act on goods falling under heading 9801 of the First Schedule to the Customs Tariff Act. (2) Notwithstanding anything contained in sub-rule (1), the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lyi....

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....(E), dated the 9th Sep, 2003] shall, respectively, be utilized only for payment of duty on final products, in respect of which exemption under the said respective notifications is availed of: Provided also that no credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, shall be utilized for payment of service tax on any output service: Provided also that the CENVAT credit of any duty specified in sub-rule (1), except the National Calamity Contingent duty in item (v) thereof, shall not be utilized for payment of the said National Calamity Contingent duty on goods falling under tariff items 8517 12 10 and 8517 12 90 respectively of the First Schedule of the Central Excise Tariff: Provided also that the CENVAT credit of any duty mentioned in sub-rule (1), other than credit of additional duty of excise leviable under section 85 of Finance Act, 2005 (18 of 2005), shall not be utilised for payment of said additional duty of excise on final products." From the reading of the above Rule, in Rule 3 (1)(v), the Cenvat credit includes the NCCD leviable under Section 136 of Finance Act, 2001. As per this provision, credit of NCCD is a Cenvat c....

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....ces, used in the manufacture of final products cleared after availing of the exemption under the following notifications of Government of India in the Ministry of Finance (Department of Revenue), - (i) No. 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated 8th July, 1999]; (ii) No. 33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated 8th July, 1999]; (iii) No. 39/2001-Central Excise, dated the 31st July, 2001 [G.S.R. 565 (E), dated the 31st July, 2001]; (iv) No. 56/2002-Central Excise, dated the 14th November, 2002 [G.S.R. 764(E), dated the 14th November, 2002]; (v) No. 57/2002-Central Excise, dated 14th November, 2002 [G.S.R. 765(E), dated the 14th November, 2002]; (vi) No. 56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003]; and (vii) No. 71/2003-Central Excise, dated the 9th September, 2003 [G.S.R. 717(E), dated the 9th September, 2003], shall, respectively, be utilized only for payment of duty on final products, in respect of which exemption under the said respective notifications is availed of. Rule 3(4) provides that CENVAT credit may be utilized, inter alia, for payment of any duty ....

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....nd he came to the conclusion that CENVAT credit of duty paid on inputs can be utilized only for payment of duty on the final product as per the second proviso to Rule 3(4) but CENVAT credit on any other duty could not be utilized for payment of NCC duty. Accordingly, the said Commissioner confirmed the demand of Rs. 82,07,125/- and passed an order for recovery of NCC duty from the assessee. 15. Feeling aggrieved, the assessee preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal at Kolkata. The appeal filed by the assessee was registered as Excise Appeal EDM 648/2006. The CESTAT noticed the provisions of Rule 3(4) as well as the provisions of Rule 3(7) of the CENVAT Credit Rules and held that though credit of NCC duty could be utilized for paying NCC duty only, the restriction would not extend to utilization of credit of duty which is not specifically listed in Rule 3(7). The corollary to this argument is that since credit on basic excise duty is not mentioned in Rule 3(7), CENVAT credit on basic excise duty could be utilized for payment of NCC duty. 16. We are in agreement with the view expressed by the CESTAT. In terms of Rule 3(1) a manufacturer or ....