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2018 (1) TMI 770 - UTTARAKHAND HIGH COURTArea based exemption - exemption in respect of NCCD, EC and SHEC - N/N. 50 of 2003 dated 10.06.2003 - CENVAT credit - penalty u/s 11AC - Held that: - There is no dispute that the appellant has availed the benefit of said Notification. It be noted that under the same, the Authority has granted exemption from the whole of the duties payable under the enactments mentioned therein. In other words, it is not a case of partial exemption. There is no dispute that the appellant proceeded to clear the final products without payment of NCCD, EC and SHEC - We have already noticed the terms of the exemption Notification, which is involved in this case, namely, Exemption Notification No. 50 of 2003. This Notification was issued invoking the power under Section 5A and sub-section 3 of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section 93 of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978). The Government granted area based exemption in respect of the goods specified in the first and the second schedule to the Central Excise Tariff Act, 1985, other than certain goods, which were mentioned, with which, we are not concerned. The exemption was from whole of the duty of excise or additional duty of excise, which were levied under the said Acts. The power to exempt payment of NCCD and the cesses in terms of the Act and the Rules are certainly available in relation to NCCD and the cesses, but they remain levies under the concerned Finance Acts. Since they are part of the basket of levies embraced under Rule 3(1) making up the aggregate of the CENVAT credit, subject to any restriction or limitation, which may be found elsewhere, there can be no doubt that the assessee can make use of the basic excise duty under the Act for payment of the NCCD or the cesses on the final product. A perusal of the provisions of Section 11AC as it stood would show that the fact of payment of the duty may not help the appellant to contend that it can extricate itself from the liability to pay penalty under Section 11AC, if the appellant is otherwise liable to pay penalty under the said provision. The appellant has not paid the penalty. Therefore, if the provision relating to Section 11AC is otherwise applicable, appellant cannot lay store by payments, which it had made, be it under protest or without protest. Therefore, we reject the contention and also the question of law raised in this regard. We reject the case of the appellant that the appellant is entitled to claim the CENVAT Credit on the basic excise duty paid on the raw materials for payment of NCCD and the cesses. The question of law is answered against the appellant in all these Appeals in this regard. The fact of payment of the duties in question in all the Appeals, be it under protest or otherwise, cannot, in the light of the extant provisions, extricate the appellant from liability to pay the penalty, if it is otherwise found to be liable and the question of law raised in this regard is answered against the appellant. As far as the question relating to whether the appellant was entitled to make use of the basic excise duty paid on raw material for the payment of NCCD and the cesses and therefore, penalty should not be imposed, the matter is remitted back to the Tribunal and to the said extent. Appeal allowed in part and part matter on remand.
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