TaxTMI 
TaxTMI 
2022 (2) TMI 57
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....f duty (subject to CENVAT on inputs is not taken - conditional Exemption Notification) Notification No.59/2008-CE dated 07.12.2008 4% Adv. Notification No.29/2004-CE as amended vide Notification No.58/2008-CE dated 07.12.2008 prescribes 'Nil' rate of duty. Notification No.30/2004-CE dated 09.07.2004 prescribes 'Nil' rate of duty on cotton yarn not containing any other textile material subject to the condition that cenvat credit was not taken on inputs. Notification No.59/2008-CE dated 07.12.2008 prescribed Excise duty @ 4% ADV. on all goods falling under "CHH 5204, 5205, 5206, 5207, 5208, 5209, 5210, 5211 and 5212. The appellants availed the benefit of Notification No.30/2004 for different periods in respect of clearances to domestic parties and in respect of export clearances. They availed cenvat credit on the capital goods and the said credit was used by them for paying the duty. They availed the benefit of Notification No.29/2004 for their domestic clearances. The appellants utilized the cenvat credit taken on capital goods for payment of duty of excise on export clearances under the Notification No.29/2004 dt. 09.07.2004 for which rebate claim was filed. The rebates were ....
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.... the SCN proposes to disallow the cenvat credit for the period 07.12.2008 to 06.07.2009 and to recover the same along with interest. This amount includes 50% of the credit on capital goods taken in April 2009 in respect of capital goods received by the appellants during the period from 07.04.2008 to 06.12.2008 even though the cotton yarn, according to the department, was exempt only during the period from 07.12.2008 to 06.07.2009. This is beyond the grounds made out in the SCN. There is no dispute with respect to the eligibility of credit on the capital goods received prior to 07.12.2008 and after 06.07.2009. The original authority however confirmed the entire demand along with interest and dropped penal proceedings. Similar show cause notices were issued for different periods proposing to disallow cenvat credit on capital goods alleging that they were used exclusively for manufacture of exempted cotton yarn during the period 07.12.2008 to 06.07.2009. However, the proposals in the SCNs were confirmed by different Orders-in-Originals which were upheld by appellate authority. 8. He adverted to para-7 of the impugned Order-in-Appeal E/395/2011 and argued that Commissioner (Appeals) h....
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....tification No.29/2004-CE as amended by Notification No.58/2008-CE dated 07.12.2008 is factually and legally incorrect when there are two or more notifications simultaneously operational in respect of cotton yarn. 11. The CBEC vide Circular No.795/21/2000-CX dated 28.07.2004 has Clarified that there was no restriction in availing both the notifications simultaneously namely Notification No.29/2004-CE and 30/2004-CE both dated 09.07.2004. 12. CBEC vide Circular No.845/03/2006-CX dated 01.02.2007 [as amended vide Circular No.858/16/2007-CX dated 08.11.2007] clarified once again that both the Notification No.29/2004-CE and 30/2004-CE both dated 09.07.2004 could be availed simultaneously. The Commissioner, Coimbatore also issued Trade Notice No.14/2008 dated 11.12.2008 confirming the above. Thus appellants have relied on the CBEC Circular No.937/27/2010-CX dated 26.11.2010. The said CBEC circular is only with regard to cenvat credit of the duty paid on inputs. There is no reference in the said circular as to the eligibility of the credit on capital goods. 13. Ld. Counsel further argued that it is settled legal position that when a product / commodity is covered by two or more notific....
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....s. In para-5 of the impugned order dated 31.3.2011 in Appeal E/395/2011, the original authority has relied upon Board's circular dated 26.11.2010 to hold that appellant cannot avail the credit on capital goods. The discussion is as under : "5. I have gone through the records of the case and considered the points put forth in defence. I find that the issue as to whether manufacturers could be permitted to pay duty under Notification No.59/2008 dated 07.12.2008 in view of unconditional exemption under Notification No.29/2004 dated 09.07.2004 was referred to the Board and the Board vide Circular No.937/27/2010-CX dated 26.11.2010 had clarified as follows : ".....The period of dispute is from 07.12.2008 to 06.07.2009. During this period while one notification No.29/2004-CE as amended granted full exemption to certain items of Textile Sector without any condition, the second notification 59/2008-CE prescribed a concessional rate of duty of 4% on these items, with the benefit of Cenvat Credit. 2. The dispute was with regard to whether an assessee can avail the benefit of either of the above said two notifications whichever is beneficial to him or he is bound to avail the unconditio....
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....26-11-2010 and Circular No. 940/l/2011-CX., dated 14-1-2011 to the effect that where there are two Notifications holding the field simultaneously, an assessee is bound to avail only the one extending an unconditional exemption. This, proposition, if accepted would mean that the petitioner, in this case, could avail only of benefit under Notification No. 29/2004. 9. Circular No. 937/27/2010-CX., dated 26-11-2010 is extracted below : 'References had been received from the field formations as well as trade to clarify the ambiguity arising out of simultaneous prevalence of two exemption Notifications namely 29/2004-C.E., dated 9-7-2004 as amended by notification No. 58/2008-C.E., dated 7-12-2008 and another notification 59/2008-C.E., dated 7-12-2008. The period of dispute is from 7-12-2008 to 6-7-2009. During this period while one Notification No. 29/2004-C.E., as amended granted full exemption to certain items of Textile Sector without any condition, the second notification 59/2008-C.E., prescribed a concessional rate of duty of 4% on these items, with the benefit of Cenvat Credit. 2. The dispute was with regard to whether an assessee can avail the benefit of either of the above....
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....oimbatore has clarified by way of a Trade Notice on the following lines : 'Due to issue of these notifications, there may be cases where same product/commodity Is being covered by more than one notification. In such a situation, it is clarified that the rate beneficial to the assesses would have to be extended if they fulfill the attendant conditions of the exemption.' A copy of the Trade Notice No. 14/2008 dated 11-12-2008 issued by the Commissioner of Central Excise, Customs and Service Tax, Coimbatore is reproduced below for your information and guidance.' 11. The aforesaid two Circulars are in direct contradiction with each other. Circular No. 99/2008, dated 11-12-2008 makes it clear that where there are multiple Notifications operating simultaneously in respect of the same commodity and extending different benefits, an option must be given to the assessee to elect and choose the Notification that would be most beneficial to it. Circular No. 937/2010, dated 26-11-2010 on the other hand, limits the choice to only the Notification granting unconditional exemption. 12. This does not stand to reason. All the Notifications providing multiple choices to an assessee for tax tr....
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....red the submissions from both sides and perused the records. Capital goods, in question, had been received during January, 2005 to March, 2005 and at that time the goods manufactured by using those capital goods - cotton yarn had been cleared by a duty exemption under Notification No. 30/2004-C.E. However, from June, 2005 onward the appellants started availing benefit of Notification No. 29/04-C.E. in respect of their clearances for export where there is optional rate of duty of 4% and there is no dispute about the fact that Notification No. 29/04-C.E. and 30/04-C.E. were being availed during the same period simultaneously. In view of this position, it cannot be said that the capital goods in question had been used exclusively for the manufacture of fully exempted finished products. Under sub-rule (4) of Rule 6 of Cenvat Credit Rules, 2004, capital goods Cenvat credit is inadmissible only in respect of those capital goods which are exclusively used in the manufacture of exempted goods. But it is not so in this case. In the case of Surya Roshni Ltd. (supra) relied upon by the Commissioner (Appeals), the finished products at the time of receipt of capital goods were fully and uncondi....