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2014 (10) TMI 675 - AT - Central ExciseSimultaneous availment of exemption Notification and CENVAT Credit - Notification No. 46/2003-CE dated 17/05/2003 - Held that:- Notification No. 46/2003-CE dated 17/05/2003 grants exemption from National Calamity Contingent Duty (NCCD) on goods falling under 54.02, if they are manufactured from goods falling under same heading 54.02. The purpose of exemption is that there is no double levy of duty (NCCD) on goods falling under 54.02 both at the stage of POY as well as at the stage of texturised yarn and the duty liability has to be discharged only once, either at the stage of POY or at the stage of texturised yarn. Therefore, once the exemption is availed, the question of taking any credit once again on the POY captively consumed and utilizing the same elsewhere would not arise. Though there is no one to one co-relation required between the input and output, explanation to sub-rule (7) makes it abundantly clear that if there is a conflict between the provisions of this rule and provisions of notification, the provisions of notification shall prevail. Simultaneous availment of duty exemption and benefit of cenvat credit militates against the very object of NCCD levy and would lead to huge leakages in revenue. Therefore, the impugned order is not sustainable in law. Accordingly we set aside the same and hold that the appellant is liable to reverse the credit taken along with interest thereon as correctly held in the adjudicating authority's order. However, since the issue relates to interpretation of law, imposition of penalty is not warranted. Accordingly, we set aside the penalty imposed - Decided partly in favour of Revenue.
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