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2023 (6) TMI 585 - AT - Central ExciseCENVAT Credit - medicaments - exemption vide Notification No. 04/2006-CE dated. 01.03.2006 or not - Rule 6(3) of the Cenvat Credit Rules, 2004 - Section 11D of the Central Excise Act, 1944 - HELD THAT:- The appellant during the disputed period had cleared the pharmaceutical products on payment of duty @5% and deposited / debited the amount in statutory records. It is the case of the revenue that the disputed goods cleared by the appellant are exempted from payment of duty vide Notification No. 4/2006 and hence the appellant was required to deposit the said amount alongwith interest in terms of Section 11D of the Act. In the present matter at the time of clearances of goods appellant paid duty @5%. It is seen that the Appellant did not retain the amount collected from the customers. The provisions of Section 11D of the Central Excise Act, 1944 will come into play only when an assessee collects an amount as an excise duty and does not credit it to the government treasury. The Tribunal in the case of STERLITE INDUSTRIES (INDIA) LTD. VERSUS COMMISSIONER OF C. EX., VAPI [2007 (9) TMI 232 - CESTAT, AHMEDABAD] held that duty paid from Cenvat Account also excise duty and recovery under Section 11D of the Act is not sustainable - In the present case, the Appellant paid duty on the disputed goods and collected the amount from their customers as evident from the invoice. It is noted that the Appellant had not retained any amount and paid to the Government and, therefore, Section 11D of the Act cannot be invoked. So, the impugned order confirming demand under Section 11D is legally not correct. Whether Appellant was required to pay an amount of Rs. 62, 89,867/- (5% on clearances of disputed exempted goods) in terms of Rule 6 (3) of Cenvat Credit Rules 2004? - HELD THAT:- It is seen that, at the material point of time, there were two rates of duty applicable to Medicine - one a "nil" rate prescribed under Notification No. 4/2006-C.E. as amended and the other "5% prescribed under Notification No. 2/2011-C.E., dated 01-03-2011. Both these rates were unconditional rates. Therefore, it is not the case that the goods have been completely exempted. The “exempted goods” referred to in Rule6 have to be excisable goods which are fully exempt from duty or as chargeable to nil rate of duty. When two different Notifications prescribe two rates of duty, the assessee is at liberty to opt for whichever is beneficial to him - it is not a situation where the duty credit on inputs were availed in respect of exempted goods and dutiable goods simultaneously. It is clear that the goods supplied under Notification No. 02/2011-C.E. is not exempted. Accordingly the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 is not applicable in the facts of the case. The demand confirmed by the adjudicating authority has no legs and therefore the same cannot be sustained. Accordingly, the impugned order is set aside and Appeal is allowed.
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