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2019 (9) TMI 17 - AT - Central ExciseReversal of CENVAT Credit - exempt goods with 1% duty - applicability of rule 6 of CENVAT Credit Rules, 2004 - whether the discharge of National Calamity Contingent Duty with cess thereon suffices for the purpose of exclusion from the ambit of rule 2(d) of CENVAT Credit Rules, 2004 being exempted goods? - HELD THAT:- It is pertinent to note that ‘GSM mobile handsets’ are excisable and, therefore, discharge of any liability of duty of excise would suffice for eligibility to CENVAT credit of duty paid on inputs used in the manufacture thereof - The absence of levy of any duty other than CENVAT in Central Excise Act, 1944 is unambiguous and it is only the empowerment of section 136 of Finance Act of 2001 that imposes this levy. It would, therefore, appear that the duty of excise referred to rule 2(t) is limited to the duty leviable under Central Excise Act, 1944 except where the CENVAT Credit Rules, 2004 prescribes otherwise. This is made further apparent in rule 3 of CENVAT Credit Rules, 2004 which, while allowing availment of credit of National Calamity Contingent Duty, restricts its utilization in accordance with fifth proviso in rule 3(4) of CENVAT Credit Rules, 2004. In view of this clear segregation of National Calamity Contingent Duty from the general pool of CENVAT credit, the discharge of duty liability under National Calamity Contingent Duty would not qualify the goods to be other than ‘exempted goods’ - To permit the availment of credit of duties/tax paid on inputs/input services utilized in the manufacture of ‘GSM mobile sets’ would be tantamount to grant of refund of tax that were collected, under authority of law and in accordance with the provisions of law, at the immediately preceding stage. Thus, the respondent herein is within the ambit of rule 6 of CENVAT Credit Rules, 2004. Ineligibility to CENVAT credit of tax paid on services used in common - legality of recovery in the face of reversal claimed by respondent - HELD THAT:- It is seen that the impugned order has not examined the submissions that the obligation under rule 6 of CENVAT Credit Rules, 2004 has been duly discharged by reversal of proportionate credit and that the bar of limitation impedes recovery. The adjudicating authority should have ascertained the correctness of the claim of the respondent that the proportionate of amount of CENVAT credit had been reversed and that interest thereon had been paid before issue of show cause notice. Matter remanded for fresh decision - appeal allowed by way of remand.
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