AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 17
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....ty of 1% reimposed vide notification no. 1/2011-CE dated 1st March 2011 (serial no. 100). According to central excise authorities, for the period of exemption from duty, the procurement of common input service for the manufacture and clearance of excisable goods as well as the exempt 'mobile handsets' without maintaining separate accounts mandated the discharge of appropriate liability under rule 6 of CENVAT Credit Rules, 2004, despite the claim of respondent that the goods were subject to National Contingent Calamity Duty after 1st March 2008. Discarding the proposition, the original authority held that the levy of National Contingent Calamity Duty as duty of excise sufficed to exclude the goods from the definition of 'exempted goods' in rule 2(d) of CENVAT Credit Rules, 2004. 3. Drawing attention to the grounds of appeal, Learned Authorised Representative submits that, for qualifying as excisable goods in the said definition, is limited to the duties prescribed in the First or Second Schedule to Central Excise Tariff Act, 1985 and, the expression 'duty of excise' in rule 2(d) of CENVAT Credit Rules, 2004 being in the singular, is not to be construed as a levy collected under any....
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....basic excise duty, is exempted. We are of the view that when Rule-maker made the Cenvat Credit Rules, it had before it the understanding of the phrase "the duty of excise" in terms of the judgment of the Hon'ble Apex Court in Modi Rubber case. Furthermore, the expression "whole of the duty" is appropriately traced to the provisions contained in Section 5A of the Act, which, as we notice, enabled the Authority to grant exemption from the "whole of the duty" or exemption, which is partial in nature. It is this concept, which is seen embedded in Rule 6 read with Rule 2(d) of the Cenvat Credit Rules. The substantial duty invariably will be the basic excise duty. NCCD and other cesses are essentially surcharges, calculated as percentage of the duty. Apparently, the intention was that when the final product is exempted from the payment of the substantial part of the aggregate of the levies in a case where apart from the excise duty, there are surcharges, as NCCD and cesses in this case, then when the assessee opts for the benefit of the exemption from the duty under Section 3, then it would not also, at the same time, claim further benefit by way of Cenvat credit. It is to be noticed tha....
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.... as if the principle of strict interpretation of tax law has been given a complete go by, but that rule of interpretation would apply at a different stage, i.e., to determine whether the exemption is applicable to the assessee or not. Once such exemption is indeed found to be applicable to the assessee in question, a liberal approach is to be adopted by the Court in construing the language, such as to allow the benefit to be reaped by the beneficiary in question (Union of India v. Wood Papers Ltd.6). 20. We may notice that the primary reasoning contained in the impugned order is common for the three cesses, i.e., NCCD; Education Cess and Secondary & Higher Education Cess. These were in the nature of surcharges levied in other Acts, which have not been specifically excluded under the Notification in question. That reasoning does not prevail, more so because of the judgment in SRD Nutrients Pvt. Ltd.7 The question, thus, is whether, even though the NCCD is in the nature of an excise duty, its incidence being on the product, rather than on the value of the excise duty, that itself would make any difference to the applicability of the NCCD to excise exempt units. 21. On a proper ap....
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....IOL-245-HC-KAR-CX] and of the Hon'ble Supreme Court in Chandrapur Magnet Wires (P) Ltd v. Collector of Central Excise, Nagpur [1996 (81) ELT 3 (SC)]. In addition, the show cause notice dated 2nd November 2012 for demand beyond the normal period of limitation is alleged to be bereft of any evidence of the ingredients that would justify the invoking of the extended period and hence requires setting aside. It was also contended that the plea for leviability under rule 6(3) of CENVAT Credit Rules, 2004, for period prior to the imposition of National Calamity Contingent Duty has ignored rule 6(7) therein which is intended to operate retrospectively. It was also contended that rule 6(2) of CENVAT Credit Rules, 2004 prescribes the maintenance of separate account only for 'inputs' and not for 'input services' during the relevant period of time. It is, therefore, contended that for the period prior to March 2008, respondent had been compliant with rule 6 of the CENVAT Credit Rules, 2004. For the period thereafter, reference was invited to section 136 of Finance Act, 2001 to evince clear linkage with duty of central excise and, therefore, not open for contention by Revenue that goods continu....
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....at imposes this levy. It would, therefore, appear that the duty of excise referred to rule 2(t) is limited to the duty leviable under Central Excise Act, 1944 except where the CENVAT Credit Rules, 2004 prescribes otherwise. 6. This is made further apparent in rule 3 of CENVAT Credit Rules, 2004 which, while allowing availment of credit of National Calamity Contingent Duty, restricts its utilization in accordance with fifth proviso in rule 3(4) of CENVAT Credit Rules, 2004. In view of this clear segregation of National Calamity Contingent Duty from the general pool of CENVAT credit, the discharge of duty liability under National Calamity Contingent Duty would not qualify the goods to be other than 'exempted goods'. This would also be consistent with the scheme of CENVAT credit which is intended to ensure that the burden of any indirect tax is borne by the ultimate consumer; the ultimate consumer is the one who is not enjoined to pay tax or duty directly into the exchequer. On any manufactured goods, it is the addition to value is subject to tax and effect is given to his charge through the mechanism CENVAT credit. To permit the availment of credit of duties/tax paid on inputs/input....