TaxTMI 
TaxTMI 
2019 (6) TMI 192
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....d) without payment of duty. It is the case of the Revenue that since the appellant cleared these products without payment of duty, claiming exemption under notification No. 82/84-CE, they have to pay an amount as per Rule 6(6) of CCR 2004. It is the case of the appellant that their final product namely Dissolved Acetylene Gas is neither chargeable to nil rate of duty nor is exempted from payment of duty. In fact, the same product is being sold by them to several customers on payment of excise duty. In respect of the goods supplied to Hindustan Shipyard Limited, they avail the benefit of notification No. 82/84-CE, dated 31.03.1984 after following Chapter X procedure. It is their case that goods cleared under Chapter X procedure are neither chargeable to nil rate of duty nor are the goods fully exempted from payment of duty but are goods on which the duty is remitted. Therefore, in respect of such clearances, no reversal of CENVAT Credit under Rule 6 or payment of an amount under this rule is necessary. Ld. Counsel would submit that on an identical matter in their own case for earlier periods, this Bench vide following final orders has held in their favour: (i) Final Order N....
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....nch and prevail over the precedent orders of this Bench for the previous periods and in both orders it was held that CENVAT Credit need to be reversed. They are (1) Atlas Automotive Components Pvt. Ltd. vs. Union of India [2017(350)ELT 42 (Bom.)], paras 21, 22 & 23 of which read as follows: "21. Therefore, the observations in Para 17.1 would apply to cases which are of the nature found by the Tribunal. The allegations and the demand is clear. Petitioner No. 1 clear their final product, castings. The aluminium ingots were inputs for the manufacture of castings. The castings were cleared following the Chapter X procedure referred above. The argument that the duty was remitted and not exempted has been rejected by holding that the petitioners rightly understood the later part of Rule 57C, namely, the castings are chargeable to nil rate of duty. In the present case, the petitioners state that there is a substantive right conferred by Rule 57A. What they have referred to is Rule 192. In their argument, they contended that Rule 57C will have no application. It is their case that the duty was remitted and not exempted. The petitioners also tried to explain the concept of charge a....
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....uct were without payment of duty, that the action is justified by the petitioners. 22. We are of the clear opinion that when the impugned order terms this exercise of the petitioners as jugglery, then, that finding and remark is fully justified. We have perused the entire paper book and found that there is no explanation provided, much less reasonable and plausible by the petitioners for the decision to initially reverse the MODVAT credit, but later on shifting their stand and refusing to reverse it. It is for that the show cause notices were issued and the explanation was sought. It is in that process that the petitioners relied upon all the decisions referred above. Once they had no application to the facts and circumstances of the petitioners' case, then, we do not think that the concurrent findings in the orders impugned before us to be perverse or vitiated by error of law apparent on the face of the record. In any event, the arguments that are now canvassed before us were all considered by the appellate authority. We do not think that the impugned order suffers from any serious legal infirmity requiring interference in writ jurisdiction. 23. As a result of th....
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....riod at all. Therefore, any reference to Chapter X is factually not correct. He submits that prior to 2001, Chapter X of Central Excise Rules 1944 provided for "Remission of duty on goods cleared for special industrial purposes". The dispute in the case of SRF Limited (supra) and other judgments during the relevant period was whether this remission under Chapter X would amount to nil rate of duty or being fully exempted and if so whether MODVAT credit is admissible under the erstwhile Central Excise Rules, 1944. After 2001, these rules no longer exist. For the period relevant in this appeal, the rules in question were "Central Excise (Removable of Goods at Concessional Rate of Duty for Manufacture of Excisable and other Goods) Rules 2001. These rules did not provide for remission of duty but only prescribed for a procedure to be followed by a manufacturer who intends to avail the benefit of the notification issued under Sub Section 1 of Section 5A of Central Excise Act, 1944 granting exemption of duty to excisable goods when used for purposes specified in the notification. In other words, the provision for remission of duty no longer exists after 2001. Since the new rules only deal....
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.... does not make it not an exemption. He argued that there are several exemption notifications which are conditional such as, exemption based on value of clearances, or exemption in respect of goods of a particular specification or exemption of goods made for a particular use. In all these cases, the exemption notification is treated as an exemption. If the assessee chooses to avail exemption, the goods in question are treated as fully exempt and accordingly no CENVAT Credit is admissible to that extent. In case the CENVAT availed inputs are used both for manufacture of goods on which duty is paid and goods on which exemption is claimed, the provisions of Rule 6 of CCR 2004 would apply. He also draws the attention of the Bench to the fact that the exemption notification nowhere specifies about remission or following the procedure under Chapter X. Therefore, the order of the Tribunal in the case of S.R.F. Limited (supra) as upheld by Hon'ble Apex Court which was in the context of Chapter X procedure and the remission therein does not apply because the rules have changed and the remission no longer exists. He, therefore, argues that regardless of the earlier decisions, there is a clear....
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....al causes. (ii) Rebate of duty when goods are exported after paying the duty (Rule 18 of Central Excise Rules, 2002): Where a manufacturer pays duty, clears the goods and then exports, the amount of central excise duty is paid back to them as rebate. Rebate is also included in the definition of refund under Section 11B. (iii) Export of goods without paying duty (Rule 19 of the Central Excise Rules, 2002): When a manufacturer chooses to not pay duty before exporting, he can do so by executing a bond (or a running bond covering several transactions) undertaking to export the goods and produce proof of export. Both rebate (under Rule 18) and export under bond (Rule 19) are based on the generally accepted principle that goods should be exported but not the taxes on them. (iv) Exemption from payment of duty by notifications issued under Section 5A of the Central Excise Act, 1944: This section empowers the Central Government to issue notifications exempting goods from payment of duties either fully or partially and whether unconditionally or subject to some conditions. When a notification is issued, the tariff rate for the goods must be read with the exemption ....
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....duty on excisable goods, other than salt, used in a specified industrial process, any person wishing to obtain remission of duty on such goods, shall make application to the Commissioner in the proper Form stating the estimated annual quantity of the excisable goods required and the purpose for and the manner in which it is intended to use them and declaring that the goods will be used for such purpose and in such manner. If the Commissioner is satisfied that the applicant is a person to whom the concession can be granted without danger to the revenue, and if he is satisfied, either by personal inspection or by that of an officer subordinate to him that the premises are suitable and contain a secure store-room suitable for the storage of the goods, and if the applicant agrees to bear the cost of such establishment as the Commissioner may consider necessary for supervising operation in his premises for the purposes of this Chapter, the Commissioner may grant the application, and the applicant shall then enter into a bond in the proper Form with such surety or sufficient security, in such amount and under such conditions as the Commissioner approves. Where, for this purpose, it is ne....
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....944). The question is whether credit can be denied in cases other than NIL rate of duty or full exemption where no duty is paid for other reasons. Eg: Export under bond, Remission when goods are lost/destroyed (or found deficient in quantity due to natural causes) or remission claimed under Chapter X of the erstwhile Central Excise Rules, 1944. The issues pertaining to export of goods under bond and remission of duty for goods cleared under Chapter X procedure were decided in the cases indicated in (e), (f) and (g) below. (e) Export under bond without payment of duty: In the following cases it was decided that MODVAT credit was available where the goods are chargeable to duty but were exported without payment of duty under Bond. (i) Alpha Drug India Ltd. v. CCE, Chandigarh - 2000 (118) E.L.T. 783 (T) (ii) India Poly Fibres Ltd. v. CCE, Allahabad - 1999 (111) E.L.T. 748 (T) (iii) Reliance Industries Ltd. v. CCE, Bombay - 1995 (78) E.L.T. 595 (T) (iv) J.K. Synthetics Ltd. v. CCE, Jaipur - 1996 (87) E.L.T. 389 (T) (v) Orissa Synthetics Ltd. v. CCE - 1995 (77) E.L.T. 350 (T). (f) Remission of duty under Chapter X procedure:....
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....se duty is leviable on all excisable goods which are manufactured or produced at the rates set out in the schedule to Section in Central Excise Tariff Act 1985 read with any exemption notification. The exemption notifications provide for either full exemption or partial exemption. Further, they can provide for either conditional exemption or unconditional exemption. If the exemption notification is an unconditional one, it applies to all persons and all clearances. If it is a conditional one, it applies to such persons and clearances as may meet the conditions. A person who is entitled to the exemption may chose not to fulfil the conditions and not to claim the exemption notification also. Further, it is also possible that the same person may clear the same goods, some claiming a conditional exemption and others without conditional exemption and paying duty. Nevertheless, all these categories fall under the category of exemption as is evident from the plain reading of Section 5A. The CENVAT Credit Rules, 2004 provide for credit of duty paid on inputs subject to the condition that the final products are not either chargeable to nil rate of duty or are fully exempted. The full exempt....