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2019 (8) TMI 572 - HC - Central Excise100% EOU - CENVAT Credit - subsequent debonding of unit - appellant paid appropriate Duty and Countervailing Duty (Additional Excise Duty) on the imported/indigenously procured raw materials lying in Stock and capital goods on depreciated value - whether such Duties paid by the Assessee upon De-bonding can be availed as Cenvat Credit under Rule 3(1) of Cenvat Credit Rules 2004 against its Output Duty liability, or not in terms of para 8 of Notification No.22/2003 dated 31.3.2003? HELD THAT:- The exempted Duties under the respective enactments viz., Central Excise Duties, Additional Excise Duties and Additional Customs Duties availed by the 100% EOU Assessee at the relevant point of time, were admittedly paid by Assessee on 23.12.2002 when, it appears that it became a Domestic Tariff Area (DTA) Unit - There is also no dispute that the Duties in question were paid by the Assessee on such De-bonding on 23.2.2012, however, not adopting the procedure for payment through TR 6 Challan Forms. A careful reading of Rule 3 would establish that the purpose of giving Cenvat Credit for which various Duties paid as enumerated in 11 Clauses of Rule 3 is to give set off for the Duties paid on Inputs or Inputs Services including the Duties, Taxes or Cess as enumerated in 11 Clauses is to remove the cascading effect of duties which concept is at the bottom of Cenvat Credit Rules 2004. The whole of the Rule 3(1) is the enabling provision for giving such Cenvat Credit and the Proviso therein inserted later on by Notification No.35 of 2008 dated 24.9.2008 cannot be said to be a stand alone enabling power to provide such Cenvat Credit to the Assessee. Such a novel and out of context interpretation of the said Proviso, which, we feel is not only not happily worded, but also, placed at the wrong place in Rule 3(1), cannot be accepted to defeat the very purpose of Rule 3(1) upon an 100 EOU, when converted upon De-bonding to a DTA. There is no dispute or quarrel on the legal proposition on how to interpret a later on inserted Proviso in an enactment. But, what we are looking at is the insertion of Proviso in Rule 3 of Cenvat Credit Rules 2004 which we find it to be more in the nature of an Explanation clarifying what was in doubt earlier viz., about allowing of Cenvat Credit in respect of capital goods earlier. The allowing of Cenvat Credit on raw material was never in doubt whether on de-bonding or otherwise on procurement of raw material. The learned Tribunal has erred in denying such benefit of Cenvat Credit to the Assessee in the present cases and therefore, the present Appeals filed by the Assessee deserve to be allowed - Appeal allowed - decided in favor of appellant.
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