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2014 (9) TMI 365 - GUJARAT HIGH COURTAvailment of Cenvat credit - Double credit - Whether the Tribunal below committed substantial error of law in allowing Cenvat Credit of actual duty paid on the grey fabrics in terms of Rule 3 of the Cenvat Credit Rules, 2001 and simultaneously permitting the assessee to avail of deemed Modvat Credit on the same fabrics under the provisions of Notification No. 7/2001-C.E. (N.T.), dated March 1, 2001 and 53/2001-C.E. (N.T.), dated June 29, 2001, even though it is restricted in terms of paragraph 4 of these Notifications - Held that:- The assessee appears to be seeking to take Cenvat Credit under Rule 3 of the Cenvat Credit Rules, 2001 as well as under Rule 11 of said rules on the basis of paragraph 4 above. An attentive reading of explanation to paragraph 4 above makes it clear that the only exception to paragraph 4 is in the case of taking of actual credit under Rule 3 on capital goods. In other words, assessee may take deemed credit as well as actual credit on the capital goods only. When it comes to the inputs, it is only one time credit which is permissible. The assessee may take the benefit of deemed credit, in which case the actual credit benefit would not be available on inputs. Both the facilities cannot be availed together. In the instant case, the assessee had already availed deemed credit, therefore subsequently it was not justified in taking actual credit. It is evident that the assessee took double benefit of Cenvat credit, which was not permissible. The double benefit was obtained in respect of same goods namely unprocessed fabrics. It was taken at two stages. Once the deemed basis was adopted for claiming credit, and in the next stage the actual credit was taken and enjoyed. The Tribunal misdirected itself in reading and construing two Notifications and more particularly paragraphs 4 thereof. The Tribunal committed error in overlooking that the assessee had taken Cenvat Credit of actual duty paid on the grey fabrics in terms of Rule 3 of Cenvat Credit Rules, 2001. In that view on the same fabrics, deemed credit could not have been availed under the provisions of Notification No. 7/2001, dated 1-3-2001 and Notification No. 53/2001, dated 29-6-2001 and that such double benefit was restricted in terms of paragraph 4 of those notifications. Tribunal committed substantial error of law in holding that double credit on the same inputs can be availed of. - Decided in favour of Revenue.
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