TMI Blog2008 (9) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of which the earlier scheme was applied under which the assessees had availed of the credit facility for payment of taxes. Any manner or mode of application of the said rule would result in affecting the rights of the assessees. The Hon’ble Supreme Court further observed that Section 37 of the Act does not enable the authorities concerned to make a rule which cannot be said to be applied to the goods manufactured prior to 16-3-1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods. The Court further observed that when on the strength of the rules available certain acts have been done by the parties concerned, incidents following thereto must take place in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in placing reliance on the ratio of its judgment rendered in the case of M/s. S.V. Business (P) Ltd. v. CCE vide judgment and order dated 6-12-2006 [2007 (220) E.L.T. 443 (Tri.-Mumbai)] holding that Cenvat credit once earned legally does not lapse and there can be no objection to its utilization even after withdrawal of Deemed credit of that commodity? 2. Since identical questions are proposed in both the Tax Appeals, the above questions are reproduced from the Tax Appeal No. 9 of 2008. The facts are also taken from the said Tax Appeal. 3. It is the case of the Department that as per Notification 6/2002-C.E. (N.T.), dated 1-3-2002 as amended by Notification No. 8/2003-C.E. (N.T.) dated 1-3-2003, Deemed credit Scheme was withdrawn w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the facility of deemed credit during the period of April, 2003 was not available to the respondent-assessee. He has, therefore, taken the view that such an act of the respondent was against the interest of the Revenue as it amounted to wrongful availment of credit and utilisation leading to clearance of the goods without payment of duty in contravention of provisions of the Act and the rules and, therefore, deemed credit was confirmed against the respondent under the provisions Section 11A of the Central Excise Act, 1944 read with Rule 12 of Cenvat Credit Rules, 2002. The respondent was also held liable for interest at the prescribed rate for the amount of duty short paid (equivalent to the amount of deemed credit utilised wrongly) under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the manufacturer of the specified excisable goods as on appointed date and also for not allowing such credit to be utilised for payment of any kind of duty on any excisable goods on and from such date, consequent to the same. He further held that no rule or notification has been issued providing for lapsing of the deemed credit rightly earned till the date the relevant Notification No. 52/2001-C.E. (N.T.) and 54/2001-C.E. (N.T.) both dated 29-6-2001 and Notification No. 6/2002-C.E. (N.T.) dated 1-3-2002 was enforced for not allowing such credit to be utilised for payment of any kind of duty on any excisable goods on and from such date. He has therefore held that unutilised deemed credit earned up to 31-3-2003 before withdrawal of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n granting deemed credit was not in force on the date on which the respondent had availed of Deemed Credit alleged to be lying unutilised in the balance on the duty of discharge/payment of Central Excise Duty. He has further submitted that on scrutiny of ER-1 returns for the month of April, 2003 it was clearly noticed that the respondent had commenced to avail the benefit of Cenvat credit on actual basis of manufacture of finished product as per the amended Cenvat Credit Rules, 2002 effective from 1-4-2003 and, therefore, utilization of the Deemed Credit was wrongful. He has further submitted that the first proviso to Clause 3 of the said Notification provided that the credit of duty in respect of inputs used in goods exported under bond sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessees. The Hon ble Supreme Court further observed that Section 37 of the Act does not enable the authorities concerned to make a rule which cannot be said to be applied to the goods manufactured prior to 16-3-1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods. The Court further observed that when on the strength of the rules available certain acts have been done by the parties concerned, incidents following thereto must take place in accordance with the scheme under which the duty had been paid on the manufacture products and if such a situation is sought to be altered, necessarily it follows that right, which had accrued to a party such as availability o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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