TaxTMI 
TaxTMI 
2019 (8) TMI 572
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....ndered their EOU status on 23.2.2012 by adopting De-bonding procedure and became a Domestic Tariff Area (DTA) Unit. At the time of De-bonding, the Appellant/Assessee paid appropriate Duty and Countervailing Duty (Additional Excise Duty) on the imported/indigenously procured raw materials lying in Stock and capital goods on depreciated value as per Rules which were procured and imported without payment of duty when it was 100% EOU and after De-bonding on 23.2.2012, it became liable to pay such Duties in accordance with Notification No.22/2003-CE(NT) dated 31st March 2003. 3. The question involved in the present cases is as to whether such Duties paid by the Assessee upon De-bonding can be availed as Cenvat Credit under Rule 3(1) of Cenvat Credit Rules 2004 against its Output Duty liability, or not in terms of para 8 of Notification No.22/2003 dated 31.3.2003. 4. The Tribunal, by its impugned order, upheld the order passed by the Adjudicating Authority and held against the Assessee that the Assessee was not so entitled to avail the benefit of Cenvat Credit under Rule 3(1) of Cenvat Credit Rules 2004. Aggrieved by the same, the Assessees have preferred the aforesaid two Appeals befo....
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.... Proviso inserted in Rule 3 by Notification No.35/08-CE (NT) dated 24.9.2008 is the only enabling provision of law for allowing the Cenvat Credit to the Assessee to be taken which would be the 'amount equal to Central Excise Duty paid on the capital goods at the time of de-bonding' and therefore, the Assessee is not entitled to the Cenvat Credit in respect of Central Excise Duty and other Duties paid at the time of De-bonding and therefore, the learned Tribunal was justified in dismissing the Appeals of the Assessee. He further submitted that since the amounts of duties in question were not paid through the prescribed documents viz., Challans in the Form TR6, Rule 4 of the Cenvat Credit Rules, 2004 which provides that Cenvat Credit can be availed only subject to fulfilment of conditions for allowing the same and that requires the filing of the prescribed documents including the proof of payment in the prescribed Challan TR6 Form, which was not produced in the instant case and therefore, also, the Tribunal was justified in denying the Cenvat Credit to the Assessee. This submission is controverted by Appellant/Assessee in their written submission by saying that such payments....
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....iff Act [ * * * ] : Provided that a provider of taxable service shall not be eligible to take credit of such additional duty;] (viii) the additional duty of excise leviable under section 157 of the Finance Act, 2003 (32 of 2003); (ix) the service tax leviable under section 66 of the Finance Act; [* * *] [(ixa) the service tax leviable under section 66A of the Finance Act;] (x) the Education Cess on taxable services leviable under section 91 read with section 95 of the Finance (No.2) Act, 2004 (23 of 2004); [(xa) the Secondary and Higher Education Cess on taxable services leviable under section 136 read with section 140 of the Finance Act, 2007 (22 of 2007); and] [(xi) the additional duty of excise leviable under [section 85 of Finance Act, 2005 (18 of 2005),]] : [Provided that the CENVAT Credit shall be allowed to be taken of the amount equal to central excise duty paid on the capital goods at the time of debonding of the unit in terms of the para 8 of notification No.22/2003-Central Excise, published in the Gazette of India, part II, Section 3, sub-section (i), vide number G.S.R.265(E), dated 31st March, 2003.] (This Proviso was inserted by Notification No.35/200....
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....dated 24.9.2008)" 10. The exempted Duties under the respective enactments viz., Central Excise Duties, Additional Excise Duties and Additional Customs Duties availed by the 100% EOU Assessee at the relevant point of time, were admittedly paid by Assessee on 23.12.2002 when, it appears that it became a Domestic Tariff Area (DTA) Unit. 11. There is also no dispute that the Duties in question were paid by the Assessee on such De-bonding on 23.2.2012, however, not adopting the procedure for payment through TR 6 Challan Forms. A careful reading of Rule 3 would establish that the purpose of giving Cenvat Credit for which various Duties paid as enumerated in 11 Clauses of Rule 3 is to give set off for the Duties paid on Inputs or Inputs Services including the Duties, Taxes or Cess as enumerated in 11 Clauses is to remove the cascading effect of duties which concept is at the bottom of Cenvat Credit Rules 2004. 12. We are of the opinion that the insertion of the Proviso which is below the 11 clauses of Rule 3(1) is also a Draftsman's slip and error as the said Proviso appears to be more in the form of an Explanation which was inserted later on with effect from 24.9.2008 and not to c....
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.... said to be a stand alone enabling power to provide such Cenvat Credit to the Assessee. Such a novel and out of context interpretation of the said Proviso, which, we feel is not only not happily worded, but also, placed at the wrong place in Rule 3(1), cannot be accepted to defeat the very purpose of Rule 3(1) upon an 100 EOU, when converted upon De-bonding to a DTA. 15. The view of Bombay Bench of Tribunal in this regard in the case of Commissioner of Central Excise, Pune v. Rajdhani Fab. Pvt. Ltd. (2008 (221) ELT 435 by a short order, as approved by the Bombay High Court by dismissal of the Appeal is opportune to quote here:- "This appeal is directed against the order-in-appeal No.PII/KS/303/2006 dated 17.11.2006. 2. Considered the submissions made by both sides and perused the records. 3. The issue involved in this case is whether the appellant after debonding himself from EOU to DTA is eligible to avail the credit of the amount of duty paid on indigenously procured capital goods or not. 4. Ld. Commissioner (Appeals) while holding in favour of the respondents came to the following finding:- "I have carefully gone through the records of the case and considered the subm....
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.... is squarely covered by the decisions of the Division Bench as reported at 2007 (210) E.L.T. 241)(Tri.Bang.) in favour of the respondent. 6. Accordingly, I find that the impugned order is correct and does not require any interference. The appeal filed by the revenue is rejected." Order of Bombay High Court (News Report published in ELT) "Cenvat/Modvat credit of duty paid by EOU while debonding The Bombay High Court Bench comprising Hon'ble Mr.Justice D.K.Deshmukh and Hon'ble Mr.Justice J.P.Devadhar on 24.9.2008 rejected the Central Excise Appeal No.176 of 2008 filed by Commissioner of Central Excise, Pune-II against the CESTAT Final Order No.A/1530/2007-WZB/C-IV (SMB), dated 26.10.2007 as reported in 2008 (221) E.L.T. 435 (Tri-Mum.) (Commissioner v. Rajdhani Fab. Pvt. Ltd.). While rejecting the appeal, the High Court passed the following order: "It is clear from the record that at the time of debonding, amount equal to excise duty was paid by the respondent and, therefore, after debonding the appellant would be entitled to avail credit of that amount. The learned counsel appearing for the respondent, has rightly relied on the Circular No.185/19/96-Ces dated 19.3.1....
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.... the property tax, save as otherwise provided in the Act, is to be levied at a percentage of "the annual value of lands or buildings or both." Sub-section (3) otherwise provides inasmuch as it permits, but does not enjoin, the levying of the tax "in the case of lands which are not used exclusively for agricultural purposes and are not occupied by or adjacent and appurtenant to buildings" either at a percentage of the capital value of such lands or at such rates with reference to the extent of such lands as the Municipal Council may fix, subject to compliance with the proviso to the sub-section. If either of the alternative methods permitted by Sub-section (3), is adopted, the assessment is not on annual value. Appropriate as this sub-section was to the case of the Appellants' lands, the respondents did not in fact avail themselves of it in making the assessment complained of. In particular, they did not levy the tax at a percentage of the capital value of the Appellants' lands; they levied it at a percentage on their annual value. Section 82(2) prescribes how the annual value of lands and buildings is to be ascertained. It is to be deemed to be the gross annual rent at ....
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....chi Alloys Ltd. v. Damodar Valley Corporation ((2018) 8 SCC 281) and an earlier decision in S.Sundaram Pillai v. V.R.Pattabi Raman (1985 (1) SCC 551) and have sought to rely upon them. Therefore, the relevant extract from these two Judgments are also quoted below:- Bhaskar Shrachi Alloys Ltd case:- "Held, the latter part of the fourth proviso to S.14 of Electricity Act i.e. ... and the provisions of the Damodar Valley Corporation Act, 1948 insofar as they are not inconsistent with the provisions of this Act, shall continue to apply to that Corporation...", is a substantive provision to lay down something more than what a proviso generally deals with and is to bring in the continued application of some of the provisions of the 1948 Act which are not inconsistent with the provisions of the 2003 Act -- Also, a comparative reading of the third and the fourth provisos to S.14 of Electricity Act clearly indicates the intention of the legislature that the second part of the fourth proviso is to bring in the continued application of some of the provisions of the 1948 Act which are not inconsistent with the provisions of the 2003 Act -- Moreover, a comparison of S.14 fourth proviso with ....