TaxTMI 
TaxTMI 
2024 (2) TMI 1016
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....gain. 2. Appellant is a manufacturer of 'hybrid seeds' and 'testing kits' besides being in the business of rendering certain services. Of these, 'hybrid seeds' are exempt from payment of duties of central excise. The appellant had been availing credit of tax paid on services which were, undoubtedly, utilised not just in the manufacture of dutiable goods and taxable services but others too that, however, in terms of rule 6(5) of CENVAT Credit Rules, 2004 continued to be entitled to be availed to the full extent thereof as an exception to the general enumeration therein. With effect from 1st April 2011, that liberal exception was ended and, thereafter, such services were also required to be in compliance with rule 6(3) of CENVAT Credit Rules, 2004. On the premise that the rescinding of this restricted privilege was intended for applicability of any and all credit beyond 1st April 2011, notice was issued to the appellant herein for recovery of Rs. 130,47,45,462/- that continued to be retained in their books for the period from 2011-12 to 2014-15 By order [order-in-original no. 53/CEX/COMMR/MKR/2022-23 dated 28th December 2022] of Commissioner of Central Goods and Service Tax, Auranga....
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.... intention of the legislation and should be read in accordance with the spirit of that law. Hence, I find that words/phrases "allow/allowed" and "allowed to take/avail" are intentionally used in said Rules to specify or to elaborate or, as the case may be, to restrict the facilities of Cenvat Credit with respect to its eligibility, admissibility, legality and conditions. I, thus, find that the word "allow" used in said Rules encompasses both, "availment" of cenvat credit as well as "utilization" thereof. As the said. Rules itself are capable enough to express their provisions mentioned therein, I feel no need to discuss on any para or Chapter 5 of CBEC Manual (as is quoted by the noticee in its written submission), without going into contents of such para or chapter.' 5. Insofar as the issue of vested right is concerned, it was pointed out by Learned Special Counsel, detailed response of the adjudicating authority that '4.13.1 I, however, find that the issue involved in the matter is not of "indefeasibility" and "vested rights" with respect to Cenvat Credit lying in balance with the noticee as on 31.04.2011. No question has been raised in the show cause notice against such "inde....
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....hereof. Rule 6 relates to the manner in which credit would have to be reversed owing to the operation of those provisions in tandem with actual utilization of goods or services in specific activity of manufacture or providing of service. In terms of rule 6(1) of CENVAT Credit Rules, 2004, such credit, validly taken at the time of procurement of eligible goods or services, can be retained only upon utilization for manufacture of dutiable goods or rendering of taxable services requiring reversal upon any other utilization failing which the default provision in rule 6(3) would become applicable; this, however, is not a recovery mechanism but a mandate binding upon assessee registered under Central Excise Act, 1944 or Finance Act, 1994 and it is only upon failure to comply thereon that recovery, in terms of rule 14 of CENVAT Credit Rules, 2004, may be initiated. From a reading of these provisions taken together, it would appear that the assertion in rule 6(1) of CENVAT Credit Rules, 2004 relates to credit availed in terms of rule 3 of CENVAT Credit Rules, 2004 which, when taken, was beyond dispute but, owing to subsequent deployment either wholly or partly in production of exempted goo....
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....to the case of the appellant as there is no evidence that the impugned services had been utilized only after 31st March 2011. 9. In this connection, we may gainfully draw upon the judgment of the Hon'ble High Court of Gujarat in Commissioner of Central Excise, Ahmedabad - II v. Omkar Textile Mills Pvt Ltd [2010 (262) ELT 115 (Guj.)] thus '7. It is this order of the Tribunal which is under challenge in the present two Tax Appeals. Mr. Y.N. Ravani, learned Standing Counsel has submitted that the order passed by the Tribunal is improper, erroneous, invalid, bad in law and proceeds on misinterpretation of relevant Notification and provisions of law and, therefore, the same deserves to be quashed and set aside. In any case, according to Mr. Ravani, substantial question of law arises out of the order of the Tribunal and there is no judgment of any High Court or Hon'ble Supreme Court on this issue considering the Notification in question. Hence, both the appeals require to be admitted. He has further submitted that deemed credit availed of by the respondent was not admissible in view of the facility having been withdrawn with effect from 1-4-2003, more particularly when Notification gr....