TaxTMI 
TaxTMI 
2023 (6) TMI 585
X X X X Extracts X X X X
X X X X Extracts X X X X
....dated. 01.03.2006. By virtue of the statutory bar provided under sub-section (1A) of Section 5A of the Central Excise Act, 1944 if an excisable products is unconditionally and wholly exempted from duty under any notification issued under Section 5A of the Act ibid, then the manufacturer shall have no option to pay duty on such goods at their own volition. The Central Board of Excise & Customs vide Circular No. 937/27/2010-CX dated. 26.11.2010 has also clarified that in view of the specific bar provided under sub-section (1A) of Section 5A of the Central Excise Act, 1944, the manufacturer cannot opt to pay duty in respect of the wholly exempted goods and cannot avail the cenvat credit of duty paid on inputs. As per the revenue, the amount so....
X X X X Extracts X X X X
X X X X Extracts X X X X
....redit of the inputs and cleared the final products on payment of 5% duty. The appellant recovered this 5% duty from the customers and deposited it with the government at the relevant time. It is settled legal position that demand under section 11D can only be made when the assessee recovers an amount representing duty but does not credit it to the Government and retains it unlawfully. The Appellant in the present case has not retained any amount collected from the customers and it is not even the case of the department that whatever amount was collected as duty was not paid to the Government. Therefore, the question of demanding duty under Section 11D does not arise. Hence impugned order confirming the demand of Rs. 58,87,106/- is patently ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions one on which is exempting duty fully and another one prescribes concessional rate of duty for the same goods, then the assessee had a right to choose the notification which is beneficial to itself. In the present case, since there were two notification operating simultaneously, the appellant had the right to choose the benefit which was more beneficial to the appellant and hence the appellant decided to avail cenvat credit and pay duty at concessional rate. There is no irregularity committed by the appellant and hence the demand under Rule 6(3) of the Cenvat Credit Rules, is unsustainable. He placed reliance on the following judgments:- * Share Medical Care Vs. Union of India - 2007 (209) ELT 321 * M/s Arvind Ltd.Vs. CCE, Ahd-II - ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The Larger Bench of the Tribunal in the case of Unison Metals Ltd. v. Commissioner of Central Excise, Ahmedabad-I reported in 2006 (204) E.L.T. 323 (Tribunal-LB) = 2006 (4) S.T.R. 491 (Tribunal-LB) held as under :- "9. The scheme of Central Excise duty payment is that a manufacturer removed goods from the factory of production after payment of duty. While selling the goods, the manufacturer recovered the duty so paid. In doing so, an assessee is recouping the tax already paid. The arrangement is not that the assessee first collected the tax from the buyer of the goods and then remits the amount to the Government. Section11D has to be read keeping this scheme in view. Therefore, the provisions for "every person who is liable to pay duty......
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd under Section 11D is legally not correct. 6.4 Now we come to the question that whether Appellant was required to pay an amount of Rs. 62, 89,867/- (5% on clearances of disputed exempted goods) in terms of Rule 6 (3) of Cenvat Credit Rules 2004. It is seen that, at the material point of time, there were two rates of duty applicable to Medicine - one a "nil" rate prescribed under Notification No. 4/2006-C.E. as amended and the other "5% prescribed under Notification No. 2/2011-C.E., dated 01-03-2011. Both these rates were unconditional rates. Therefore, it is not the case that the goods have been completely exempted. The "exempted goods" referred to in Rule6 have to be excisable goods which are fully exempt from duty or as chargeable to n....