TaxTMI 
TaxTMI 
2022 (1) TMI 259
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....maintained by the appellants in their factory was Rs. 1,57,14,851/-. The appellants did not take any credit on inputs used in manufacture of finished goods during period 01.04.2007 to August 2011. With effect from 01.09.11 the appellants started availing benefit of Notification No 29/2004 -CE dated 09.07.2004 and Notification No 30/2004-CE dated 09.07.2004 simultaneously. After 01.09.2011 in addition to balance credit of Rs. 1,57,14,851/- in the Cenvat Credit Account, the appellants took fresh credit on the inputs used in the manufacture of finished goods cleared availing benefit of Notification No 29/2004-CE dated 09.07.2004. The appellant cleared finished goods as export as well as home consumption at nil rate of duty under Notification No 30/2004- CE. They also cleared the finished goods for export under ARE-1 as well as home consumption on payment of excise duty at concessional rate in terms of Notification No. 29/2004 dated 09.07.2004. The appellant utilized the fresh credit on the input received after September-2011 as well as a portion of balance Cenvat credit for payment of excise duty on the finished goods cleared under notification no. 29/2004-CE dated 09.07.2004. The tot....
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....No. 30/2004-CE as amended which is conditional notification i.e. exemption is available provided Cenvat credit on inputs has not been taken, to which the provisions of Rule 11(3) (i) of the credit will apply and Rule 11(3)(ii) will not apply. He submits that issue is no longer res-Integra and settled by plethora of judicial decisions. This very same issue has been considered by the Hon'ble Tribunal in the following cases:- • CCE Vs. Orient Syntex- 2020 (40) GSTL 56 (T) • Jansons Textile Processors v. Commissioner -2018 (7) TMI 850-(T) • Kanchan India Ltd. v. Commissioner 2019 (1) TMI 310-(T) • Patodia Filaments Pvt. Ltd. v. Commissioner-2019 (4) TMI 435-(T) • Patodia Filaments Pvt. Ltd. v. Commissioner-2019 (8) TMI 201-(T) 2.1 He further submits that the Learned Commissioner in impugned order is incorrect in upholding the recovery of the credit amount Rs. 44,44,791/- utilized for payment of duty on the finished goods cleared during the period from September-2011 to June-2013 hence, the impugned order is liable to be set aside. He further submits that there was no suppression of facts by the appellant and hence the ....
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....s for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or (ii) the said final product has been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported." From the plain reading of the above rule 11(3) (i) (ii) it is clear that in terms of Clause (ii) of Rule 11(3) the balance credit shall lapse only if the assessee availed an exemption which is absolutely and exempted which is other than absolute covered under clause (i) of Rule 11(3). In case of clause (i) of Rule 11(3) no similar condition of lapsing of balance cenvat credit is provided. In the present case undisputedly the appellant have availed the benefit of Notification No 30/2004-CE which is a conditional one and the said condition p....
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....ndred per cent. export-oriented undertaking" shall have the same meanings as in Explanation 2 to sub-section (1) of section 3. [(1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods.] ................... In the aforesaid section 5A in Sub-section (1) exemption is of two category one is exemption which exempt the goods absolutely and other is subject to such condition as specified in the Notification. In terms of Sub-section (1A) which makes clear distinction that in case of exemption granted absolutely the manufacturer of excisable goods shall not have any option except to pay the duty. The only option is to avail the exemption and no duty shall be paid. Therefore there is a clear distinction between an absolute exemption and conditional exemption. Therefore, the contention of the adjudicating authority that since the exemption notification was issued under section 5A the appellant is otherwise required to pay bala....
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....ents. 7.1 In case of Patodia Filaments Pvt. Ltd. (supra), the Tribunal has observed as under :- "6. Heard both the sides and perused the records. We find that the notification No. 30/2004-C.E., dated 9-7-2004 is not an absolute notification but a conditional notification issued under Section 5A. The notification has the condition of non-availment of Cenvat credit. The sub-rule (3)(i) and (ii) of Rule 11 of the CCR, 2004 are separate. In the present case the sub-rule 3(i) would thus apply as per which the manufacturer is required to pay an amount equivalent to the Cenvat credit in respect of inputs used in the manufacture of said final product and is lying in stock or in process or is contained in final product lying in stock. In the present case all the conditions enumerated under sub-rule 3(i) has been followed by the Appellant and he is not required to reverse the entire credit lying in balance on the date of opting Notification No. 30/2004-C.E., dated 9-7-2004. Therefore, the balance credit is not liable to be reversed. For the same reason the credit utilised by him for clearance of finished goods or capital goods. We also find that on similar issues in the cas....
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....lows :- "5.1 The core issue that comes up for decision is whether the transitional provisions contained in sub-rule (3) of Rule 11 will be applicable to both sub-rules 3(i) and 3(ii). For better understanding, the relevant provisions relating to manufacturers are reproduced as under :- RULE 11. Transitional provision. - ... ... ... (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the Cenvat credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under Section 5A of the Act; or (ii) the said final product has been exempted absolutely under Section 5A of the Act, and after deducting the said amount from the balance of Cenvat credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any ....
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....are of the considered opinion that the ratio laid down in the judgments are squarely applicable in this case, and therefore, we allow the appeal." 7. After going through the facts of the case which is similar, to the above we propose to apply the same in case at hand, we allow the appeal." 8. In view of the above judgments, it is settled that after reversal of credit in respect of input, input in process and input contained in final products whatever balance is left shall lapse only when the Notification is unconditional. As regards, the judgment relied upon by the Learned Authorised Representative, on careful consideration, we find that the issue involved in such case was eligibility of exemption Notification No. 30/2004-C.E. Though some observation was made by the Hon'ble Bench, however, no final decision was given on the said issue, as the said issue was not the subject matter of the appeal. 9. As regards the judgment in the case of Supertex Industries Ltd. (supra) relied upon by the Learned Authorized Representative, the same is not directly applicable in the facts and circumstances of the present case and the same is distinguished. The impugned order....
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.... sub-rules are separated not by just a particle 'or' but also by a semicolon (;), thus creating an additional wall for conveying mutual exclusivity between the two sub rules. There is also no basis for suggesting that the use of 'or' between these sub-rules conveys the meaning 'or both'. For example, to be able to impose both a fine and a penalty, one would need to add 'or both' to the end of the phrase. That surely is not the case here. 5.3 Viewed in this context, it is but obvious that the legislature intended the said sub rules 3 (i) and 3 (ii) to be two distinct and separate alternatives, with distinctively different qualifying factors and conditionality. 5.4 In sub rule 3 (i), the assessee has an option to avail of a particular notification or otherwise; when such assessee takes such option, he will be required to pay an amount equivalent to cenvat credit, if any, .. taken by him in respect of inputs received for use in the manufacture of the final product and is lying in stock .. or in process .. or is contained in the final product lying in stock. There is no other requirement that the assessee falling within the scope of....
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....on for decision is whether the respondent will be covered by the provisions of Rule 11(3)(i) or 11(3)(ii). 7. We find that the identical issue has been considered in detail in the case laws relied by the respondent. In the case of Jansons Textile Processor (supra), the Chennai Bench of the Tribunal has taken the view that in case of conditional exemption such as exemption under Notification No. 30/2004, the assessee will be covered only by Rule 11(3)(i). This decision has been followed in the case of Wearit Global Ltd. (supra) wherein the Tribunal observed as under: "5. Àfter hearing both the parties, we are of the opinion thatinthe present case the appellant has opted for exempt ion as per the Notification No. 30/2004-CE where the exemption is conditional. As per Rule 11(3) (ii) CCR, Cenvat Credit balance will lapse only if the product is exempted absolutely under Section 5A of Central Excise Act.But since the Notification No. 30/2004-CE dated 09.07.2004 is a conditional notification, hence only Rule 11 (3)(i) of CCR would apply which does not mandate any such lapsing". 8. By following the settled position of law as above, I find no infirmity in t....
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.... 'or'. The use of semicolon ( ; ), the punctuation mark is to separate two closely related independent clauses. 'Or' is a particle' used to connect words, phrases or classes representing alternatives [ J. Jayalalitha Vs UOI - (1999) 5 SCC 138 ]. Only if the phrasing of the legal provision is such that in actuality 'and' is intended, should it be examined whether the alternatives separated by 'or' are not mutually exclusive. The Courts may construe 'or' as 'and', only if they find from the context that the wrong word must have been used.[Ranchhoddas Atmaramv.UOI, AIR 1961 SC 935; Firoj Farukee v. State of West Bengal, AIR 1972 SC 2141] . However, in respect of the sub-rule 3 (i) and sub-rule 3 (ii) ibid, there should not be any such confusion or doubt, since those two sub-rules are separated not by just a particle 'or' but also by a semicolon (;), thus creating an additional wall for conveying mutual exclusivity between the two sub rules. There is also no basis for suggesting that the use of 'or' between these sub-rules conveys the meaning 'or both'. For example, to be able to impose both a fine and a penalty, one would need to add 'or both' to the end of the phrase. That surely is ....