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2013 (9) TMI 346 - AT - Central ExciseArea bases Exemption Notification No.56/2002 - payment of duty without utlizing Modvat / Cenvat Credit and claiming refund of duty paid in cash thereafter - In terms of the said notification, the appellant was required to pay duty by first exhausting their Modvat credit available and then through PLA - Held that:- The credit was not availed by the appellant at all and question of utilization does not arise – Relying upon CCE, Jammu v. New India Wire & Cables [2008 (7) TMI 213 - CESTAT NEW DELHI] - Benefit of a Notification was to be strictly construed so as to achieve the object thereof - Right to exemption of duty (refund) arised only upon fulfilling mandatory conditions of the Notification in question which prescribed priority, mode and sequence of discharge of duty liability during tax holiday period. The notification in question having limited the exemption (refund) to duty paid only on incremental value of output through PLA, exemption (refund) of duty on input component contained in finished goods was not permitted - Claim of Modvat credit during material period being mandate of law, failure to seek set off thereof duly, debars exemption (refund) and right to claim that at a future date is deniable - It may be stated that when inputs extinct upon use in manufacture of the finished goods, deferment of set off of Modvat credit was not permitted - No right was vested with the assessee to carry forward input credit beyond material period in absence of carry forward provision in the Notification in question - Apart from this, no claim for set off of input credit duly during material period proves oblique motive as well as premeditated design of assessee against Revenue intending to be enriched at the cost of the exchequer. Such an act also debars to plead that the proceeding is time-barred. It was rightly observed by ld. Technical Member that there was failure to fulfil mandatory condition of the Notification by the appellant when it failed to use the Modvat credit available to it during tax holiday period. Inadvertent mistake plea of appellant is certainly a misplaced sympathy to sway away Tribunal towards sympathetic consideration. Accordingly observation of learned Technical Member in this regard cannot be brushed aside since claim for Modvat credit was within the exclusive knowledge of appellant in view of its past experience of several years being engaged in the line of manufacture. Failure of appellant to set off Modvat credit diminished its right to exemption (refund) and the plea of revenue neutrality is baseless for non-fulfilment of statutory obligation. Dissenting Opinion – Member (Technical) was having a dissenting opinion from Member(Judicial) therefore he delivers a separate judgement – as per the majority the Assesse was able to established Prima facie case and was allowed for the waiverd of pre-deposit – but the pre-deposit of excess exemption availed from 1-4-2008 onwards (to be quantified by applicant) was required to be made.
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