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2022 (9) TMI 266
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....or additional duty of excise leviable under thereon as is equal to the duty payable on the value addition undertaken in the manufacture of the said goods by the said unit. The exemption mentioned in the aforesaid notification was provided by way of refund of duty paid on the goods cleared through PLA(other than that paid using Cenvat). The appellant were operating under the said notification from 01.03.2008 and had given an option to take credit of the amount calculated in the manner specified in the para 2 of the notification, in his account current maintained in terms of excise manual of supplementary instruction issued by the CBEC. The credit of refund amount was also taken by the appellant in the current account. The appellant had vide letter dated 01.03.2008 exercise their option for taking credit in terms of para 2C of Notification 39/2001-CE for the year 2008-2009. The relevant extract of the notification as it exists w.e.f 01.04.2008 are reproduced below. Exemption to exicable goods (except those specified in Annexure) cleared from units in Kutch (Gujarat). --- In exercise of the powers conferred by sub- section (1) of section 5A of the Central Excise Act, 1944 (1 ....
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....ny goods 8. 72 or 73 All goods 39 Any goods, other than iron ore 9. 74 All goods 15 Any goods 10. 76 All goods 36 Any goods 11. 85 Electric motors and generators, electric generating sets and parts thereof 31 Any goods 12. 25 Cement 75 Lime stone and gypsum 12A. 25 Cement clinker 75 Lime stone 13. 17 or 35 Modified starch or glucose 75 Maize, maize starch or tapioca starch 14. 18 Cocoa butter or powder 75 Cocoa beans 15. 72 or 73 Iron and steel products 75 Iron ore 15A. 29 or 38 Fatty acids or Glycerine 75 Crude palm kernel, coconut, mustard or rapseed oil 15B. 72 Ferro alloys, namely, ferro chrome, ferro manganese or silico manganese 75 Chrome ore or manganese ore 16. Any chapter Goods other than those mentioned above in S. Nos. 1 to 15 36 Any goods Provided that where the duty payable on value addition exceeds the duty paid by the manufacturer on the said excisable goods, other than the amount paid by utilization of CENVAT credit during the month, the duty payable on value addi....
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....such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year; (d) the manufacturer shall submit a statement of the total duty payable as well as the duty paid by utilization of CENVAT credit or otherwise and the credit taken as per clause (a), on each category of goods manufactured and cleared under the notification and specified in the said Table, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 15th of the month in which the credit has been so taken; (e) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall determine the amount correctly refundable to the manufacturer and intimate to the manufacturer by the 15th day of the next month to the month in which the statement under clause (d) has been submitted. In case the credit taken by the manufacturer is in excess of the amount determined, the manufacturer shall, within five days from the receipt of the intimation, reverse the said excess credit from....
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.... 1625153 10/2008 06.11.2008 1095290 11/2008 05.12.2008 1703034 12/2008 07.01.2008 1029902 01/2009 06.02.2009 898835 02/2009 09.03.2009 947884 03/2009 09.04.2009 961209 04/2009 06.05.2009 867670 05/2009 09.06.2009 1177172 06/2009 07.07.2009 1491401 07/2009 07.08.2009 1322942 08/2009 10.09.2009 1367953 09/2009 12.10.2009 1235610 10/2009 09.11.2009 1155716 11/2009 14.12.2009 754849 12/2009 15.01.2009 1040041 01/2010 11.02.2010 947884 02/2010 10.03.2010 859572 TOTAL 29246090 In support of the claim, the claimant has submitted copies of [1] ER-1 return [2] Personal Ledger Account for the period from April 2008 to February 2010 [both months inclusive]. I find that Para 2A of Notification No. 39/2001-CE dtd. 31.07.2001 stipulates that "In cases where all the goods produced by a manufacturer are eligible for exemption under this notification, the exemption contained in this notification shall be subject to the condition that the manufacturer first utilizes whole of the CENVAT credit available to him on t....
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.... of excisable goods, the said goods shall be considered to have been cleared without payment of duty to the extent of utilisation of such irregular or excess credit". From the above it is apparent that since the appellant was not availing Cenvat Credit. It was held that the appellant had violated the condition given in para 2A of Notification No. 39/2001-CE which mandates that the manufacturer has to first utilize whole amount of Cenvat Credit available to him on the last day of the month under consideration for payment of duty of goods cleared during such month and pays only the balance amount in cash. In the instant case, since no amount of Cenvat Credit was availed, it was held that the appellant has not utilized the Cenvat Credit available to him for payment of duty first and since the appellant has paid the entire amount of duty under PLA the appellant has violated the condition prescribed under in para 2A of Notification No. 39/2001-CE dated 31.07.2001. 3. The order of the Deputy Commissioner was passed without issuing any Show Cause Notice and without granting any hearing to the appellant. The said order of Deputy Commissioner was challenged before Commissioner (Appeal....
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.... as under: "2A In cases where all the goods produced by a manufacturer are eligible for exemption under this notification, the exemption contained in this notification shall be subject to the condition that the manufacturer first utilises whole of the CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and pays only the balance amount in cash." 9.2 It is noticed that the appellants have not availed / utilized the Cenvat credit on the respective inputs which becomes mandatory on their part once they opt to avail special area based exemption under the Notification No. 39/2001, as amended, as per para 2A of the said Notification. 10. I find that the appellant has not followed the basic condition of the notification no. 39/2001-C dated 11.07.2001. Para 2A of the said notification envisages the availability of exemption to the manufacturer only if whole of the Cevat credit available is availed and utilized on the last day of the month under consideration for payment of duty on goods cleared. And only after utilization of the Cevat the manufacturer becomes entitled for payment of....
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....s produced by a manufacturer are eligible for exemption under this Notification, the exemption contained in this Notification shall be subject to the condition that the manufacturer first utilizes whole of the CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and pays only the balance amount in cash." 5. The claim of the appellant is that if they by choice have not availed cenvat credit, then no credit is "available" to the appellant, and therefore, they have complied with the restriction imposed in para 2A of the Notification 39/2001-CE. The claim of the Revenue is that if the appellant could have availed credit and have chosen not to avail the credit then the credit that appellant could have availed is to be treated as credit available to the appellant and since the appellant failed to use the credit available to the appellant, they have violated the condition prescribed in para 2A of Notification 39/2001-CE. 6. The notification 39/2001was introduced in order to promote the industry in disaster affected region of Kutch as a relief. The idea was to grant the special incentives to industriess....
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....hat if Scenario Period CENVAT Credit availed PLA Total Duty Eligibility as per value addition rate Exemption Availed in both scenarios Present Scenario (CENVAT Credit Not availed by the appellant) April 2008 to February 2010 0.00 Rs.8.48 Rs.8.48 Rs.2.92 Rs.2.92 CENVAT Credit has to be considered April 2008 to February 2010 Rs.0.38 Rs.8.10 Rs.8.48 Rs.2.92 Rs.2.92 The Above calculation has not been countered or challanged by the Revenue. It is apparent from the above calculation that the fact of taking, or not taking, the credit has not made any difference in the quantum of refund admissible to the appellant. This is so because the notification limits the credit available to the appellant to a percentage of the value addition specified in the Column (4) of the said Table in the Notification No.39/2001-CE.From the above, it is apparent that there is no extra refund admissible to the appellant on account of non availment of Cenvat credit. In fact, the appellant haspaid that much more duty in cash. 6.2 Learned counsel for the appellant has argued that there is no statutory stipulation that as....