TaxTMI 
TaxTMI 
2019 (1) TMI 1164
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..../2004-CE, both dated 09/07/2004; commissioner held that benefit of Notifications Sl.No.10 & 30/2004-CE dated 09/07/2004 as well as Notification No.67/95-CE dated 16/03/1995 are not available to the appellants; he imposed penalty under Section 11AC of the Central Excise Act to the extent of Rs. 2,49,62,672/- and further penalty of Rs. 10,000/- under Rule 25 of the Central Excise Rules, 2002 and he appropriated the amount, deposited under protest, of Rs. 81,04,284 towards duty and Rs. 12,54,441 towards interest. 2. Ld. Counsel for the appellants submitted that though the Appellant herein was simultaneously availing the benefit of both the Notification Nos.29/2004-CE & 30/2004-CE and had taken initially CENVAT Credit on all eligible inputs, still was retaining only the eligible credit to the extent of the inputs used in the manufacture of final products cleared essentially for exports, on payment of duty under Notification No.29/2004-CE and was consequently computing and reversing the credit availed to the extent of the said inputs used in the manufacture and clearance of the final products covered under the said Notification No.30/2004-CE, even prior to the clearance of the said f....
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.... of excise would become payable on the said polyester tops captively consumed, since the Appellant would be clearly eligible to the benefit of Notification No.67/95-CE, as the conditions prescribed therein including the discharging of the obligation prescribed under Rule 6 of the CENVAT Credit Rules, have been complied with in full, in as much as the said polyester tops have been used commonly in the manufacture of both dutiable and exempted final products and the credits involved having been retained only to the extent of the said inputs having been used in the manufacture of dutiable final products thereof. However, Show Cause Notice, dated 09/03/2009, came to be issued alleging, inter alia, that the Appellant is liable to pay duty on the said polyester tops captively consumed and used in the manufacture of final products which are cleared by availing the benefit of the said Notification No.30/2004-CE and that the benefit of the said Notification No.67/95-CE cannot be extended since the Appellant herein has not fulfilled the conditions prescribed therein and further even the benefit of Sl.No.10 of Notification No.30/2004-CE, cannot also be extended in as much as the Appellant her....
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....ry decision rendered by any other Hon'ble High Courts or Tribunal. 2.4. The only allegation made in this regard for not extending the benefit of the said Sl.No.10 of the said Notification No.30/2004-CE, is that polyester tow falling under heading 5501 cannot be considered as polyester staple fibre contrary to the findings of Hon'ble Bombay High Court in paragraphs 58 & 59 of the order. A reading of the above judgment particularly from paragraph 38 onwards would show that it is fully applicable to the facts of the appellant. The decision Hon'ble Bombay High Court has been further followed by the Hon'ble Tribunal inter alia in the subsequent decision rendered in the case of Raymond Ltd. Vs. CCE reported in 2010 (260) ELT 279 (Tri-Mum.). In view of the fact that there are no contrary judgements the ratio of Hon'ble Bombay High Court needs to be followed, as a binding precedent, in view of the following cases: i. J.K. Tyre & Industries Ltd Vs ACCE - 2016 (340) ELT 193 [Tri-LB] ii. CCE Vs Kashmir Conductors - 1997 (96) ELT 257 [Tri-5Mem. LB] iii. Khanbhai Esoofbhai Vs CCE - 1999 (107) ELT 557 [Tri-5Mem. LB] 2.5. Ld. Counsel further submitted that benefit of Notification N....
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....Medical Care Vs UOI reported in 2007 (209) ELT 321 (SC) and Tribunal in the case of Adani Exports Ltd. Vs. CC reported in 2007 (216) ELT 279 (Tri-Ahmd) held that benefit of any eligible notification can be claimed at any stage thereof. v. For the period from July 2004 to February 2007, credit on all inputs were availed and later on credit was reversed before effecting clearance in respect of the exempted final products cleared by availing the nil rate of duty exemption under the said Notification No.30/2004-CE and followed Circular dated 01/02/2007. This would satisfy fully and completely the said Condition No. (vi) of the Notification No.67/95-CE thereto. Therefore, the findings of commissioner, at lease for the period up to Feb, 2007 are incorrect. vi. Similarly, even for the period from March 2007 onwards and up to March 2009, the said benefit cannot be denied since the requirements as contained in Rule 6(1) of the Cenvat Credit Rules, read with the said Circular dated 01/02/2007 having been followed in toto, in as much as no credit has been taken or availed on the inputs used for manufacture and clearance of exempted products, in terms of the said Notification No.30/2004-....
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....xcise Tariff Act), specified in the corresponding entry in column (2) of the said Table, from so much of the duty of excise specified thereon under the First Schedule (hereinafter referred to as the First Schedule) to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table. Explanation. - For the purposes of this notification, the rates specified in columns (4) of the said Table are ad valorem rates, unless otherwise specified. S. No. Chapter or heading No. or sub-heading No. Description of goods Rate under the First Schedule (1) (2) (3) (4) 1 5004.19 All goods 8% 2 51.05, 5106.11, 5106.12, 5106.13, 5107.11, 5107.12, 51.08, 51.09, 51.10, 51.11, 51.12 All goods 8% 3 52.04, 5205.11, 5205.19, 5206.11, 5206.12, 52.07, 52.08, 52.09 All goods - (i) of cotton, not containing any other textile material (ii) others 4% 8% 4 53 (except 53.01, 53.03, 5305.31, 5305.39, 5306.90, 53.07, 5308.11 and 5308.90) All goods 8% 5 54.01, 54.04, 54.05, 54.06, 54.07 All goods 8% 6 55.08, 55.09, 55.10, 55.11, 55.....
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....xcise leviable thereon under the said Central Excise Act : Provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs or capital goods has been taken under the provisions of the CENVAT Credit Rules, 2002, - S. No. Chapter or heading No. or sub-heading No. Description of goods (1) (2) (3) 1. 50.04, 50.05 All goods 2. 51.05, 5106.11, 5106.12, 5106.13, 5107.11, 5107.12, 51.08, 51.09, 51.10, 51.11, 51.12 All goods 3. 52.04, 5205.11, 5205.19, 5206.11, 5206.12, 52.07, 52.08, 52.09 All goods 4. 53 (except 53.01, 53.03, 5305.31, 5305.39, 5306.90, 53.07, 5308.11 and 5308.90) All goods 5. 54.01, 54.04, 54.05, 54.06, 54.07 All goods 6. 54.02, 54.03 Yarns procured from outside and subjected to any process other than texturising, by a manufacturer who does not have the facilities in his factory (including plant and equipment) for manufacture of yarns or textured yarn (including draw twisted and draw wound yarn) of heading 54.02 or 54.03. Explanation, - For the purposes of this exemption, "manufacture of yarns" means manufacture of filaments of organic pol....
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....e Rules, 1944 manufactured in a factory and used within the factory of production; (ii) goods specified in column (2) of the Table hereto annexed (hereinafter referred to as 'inputs') manufactured in a factory and used within the factory of production in or in relation to manufacture of final products specified in column (3) of the said Table; from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) : Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products (other than those cleared either to a unit in a Free Trade Zone or to a 100% Export Oriented Undertaking or to a unit in an Electronic Hardware Technology Park or to a unit in a Software Technology Parks), which are exempt from the whole of duty of excise leviable thereon or are chargeable to 'Nil' rate of duty. Explanation. - For the purposes of this notification 'inputs' does not include - except 6307.10) All goods 5.3. On going through the notification No 30/2004, it is seen that there is a condition that Provided that nothing contained in this no....
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.... (240) E.L.T. 180 (Bom.) We find that the Hon'ble High Court has held that: 46. Notification No. 30/04 does not provide for exemption on synthetic/artificial filament tow (55.01/55.02). Therefore, on manufacture and clearance of tow (55.01/55.02) mandatory excise duty at 16% has to be paid under the new tax regime. Where tow (55.01/55.02) is manufactured but cleared after cutting it into pieces of a length less than 2 metres, then, it is classified under Heading 55.03/55.04. In such a case, mandatory excise duty at 16% is payable on clearance of tow of a length less than 2 metres (55.03/55.04). Where mandatory duty paid tow of a length exceeding 2 metres (55.01/55.02) or tow of a length less than 2 metres (55.03/55.04) is converted into processed staple fibres (Tops) falling under Heading 55.06/55.07, under the new tax regime, no excise duty would be payable on clearance of Tops (55.06/55.07). Therefore, serial No. 10 of the Notification No. 30/04 provides that excise duty on manufacture and clearance of goods falling under Heading 55.06/55.07 would be exempt provided the inputs used are firstly procured from outside and secondly, the manufacturer of goods falling under Heading ....
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....ady been paid. Such a construction of the Notification which defeats the mandate of the new tax regime cannot be accepted. Therefore, reading the term 'staple fibre' harmoniously with the new tax regime, it must be held that the term 'staple fibres' applies to inputs falling under Headings 55.01 to 55.04 which are used in the manufacture of Tops (55.06/55.07). 50. It is true that Chapter 55 of the CET classifies Tow under Headings 55.01/55.02 or 55.03/55.04 based on the length of the tow. In view of Chapter Note 1 to Chapter 55, tow of a length exceeding 2 metres are classified under Heading 55.01/55.02 and tow of a length not exceeding 2 metres are classified under Heading 55.03/55.04 as 'staple fibres' not carded, combed or otherwise processed for spinning. However, both these products are covered under Chapter 55 titled as 'man-made staple fibres'. In the General Rules for the interpretation of the First Schedule to the CET, it is stated that the titles to the Chapters are provided for easy reference only. If for easy reference, the 'chapter 55 man-made staple fibres' applies to Tow (55.01/55.02) as well as unprocessed staple fibre (55.03/55.04), then, for the same reason the....
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....nputs falling under Heading 55.01/55.02, because Tops (55.06/55.07) are obtained by carding and combing the unprocessed staple fibre (55.03/55.04) and Tops (55.06/55.07) are also obtained from Tow (55.01/55.02) by a process other than carding and combing, viz by the process known as 'Tow to Top process'. Therefore, to construe that the term 'staple fibre' in the Notification No. 30/04 applies only to the uncarded/uncombed staple fibre (55.03/55.04) would be contrary to the express words used in the Notification. 54. Apart from the above, the Notification No. 30/04 specifically provides that the exemption would not be available to a manufacture of goods falling under Heading 55.06/55.07 having facility to manufacture inputs falling under Headings 55.01, 55.02, 55.03 and 55.04, which clearly shows that the term staple fibre is intended to refer to inputs falling under Headings 55.01, 55.02, 55.03 and 55.04. If the term staple fibre was intended to apply only to the staple fibre falling under Heading 55.03/55.04, then there was not need to refer to the goods falling under Headings55.01, 55.02, 55.03 and 55.04 in the Notification. Therefore, it is clear that since the goods falling ....
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....of CCR and also the Circular 01/02/2007 and as such, no credit was taken in respect of goods cleared under 30/2004. Therefore, we find that the goods arising at the intermediate stage of manufacture by the appellants are squarely covered by Notification No. 67/95 and fall under the exclusion at No. (vi) as they have discharged the obligation in terms of Rule 6(1) of CCR. We find, therefore, that the benefit of Notification No. 67/95 cannot be denied. 6.1. However, as discussed above and as held by Hon'ble High Court of Mumbai, the appellants are eligible for the benefit of Notification No. 30/2004 in spite of the fact that an intermediate product "Polyester Top" consumed captively arises on which ne duty is paid. We find that Co-ordinate Bench of Tribunal in the case of Raymond Ltd., 2010 (260) ELT 279 (Tri. Mum.) held following the decision of High Court that: "3. The learned counsel for the assessee submits that the issue stands settled by the Hon'ble High Court in the assessee's own Writ Petition No. 2931 of 2008. He has also produced a copy of the Hon'ble High Court's judgment vide Raymond Ltd. v. UOI - 2009 (240) E.L.T. 180 (Bom.). It is submitted that the above writ pet....