TMI Blog2009 (4) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... and against the appellant-revenue. Accordingly, the appeals are dismissed. - 55 of 2004 with 51 of 2006 - - - Dated:- 30-4-2009 - M.M. Kumar and H.S. Bhalla, JJ. Shri Kamal Sehgal, Advocate, for the Appellant. Shri Jagmohan Bansal, Advocate, for the Respondent. [Order per: M.M. Kumar, J.]. - These two appeals [CEA No. 55 of 2004 - Commissioner, Central Excise Commisionerate v. M/s. Malwa Industries Ltd. and CEA No. 51 of 2006 - Commissioner of Central Excise Commissionerate v. M/s. Malwa Industries Ltd. filed by the revenue under Section 35H(1) of the Central Excise Act, 1944 (for brevity 'the Excise Act') are directed against the order dated 17-10-2004 [2004 (178) E.L.T. 783 (Tri.-Del.)] passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity 'the Tribunal'). The common issue raised in these appeals is whether credit on Basic Excise Duty (for brevity 'BED') can be utilised for payment of Additional Duty of Excise leviable under Additional Duty of Excise (Goods of Special importance) Act, 1957 (for brevity 'the 1957 Act'). However, the revenue has claimed that the following substantive questions of law would emerge from the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit for payment of AED (ST) was irregular. Accordingly a show cause notice was issued requiring respondent to show cause as to why (i) AED (ST) amounting to Rs. 84,20,670/- paid by the dealer-respondent through CENVAT credit be not recovered and (ii) penal action should not be taken against them under Rule 173Q of the Rules, 1944. 4. The Commissioner of Central Excise, Ludhiana relying on the Board letter dated 14-12-2000 vide order in original Nos. l/LDH/2002 dated 30-12-2002 and 104/LDH/2003 dated 16-1-2003 dropped the proceedings arising out of the show cause notice. The Commissioner in his order has relied upon the provisions of Rule 57AB(l)(b) of the Rules, which provides that Cenvat credit may be utilised for payment of any 'duty of excise' and also upon the clarification issued on 14-12-2000 showing that CENVAT credit can be used for payment of AED (ST). He also placed reliance upon a judgement of the Delhi High Court in the case of Parekh Prints v. UOI - 1992 (62) E.L.T. 253 wherein challenge to the constitutional validity of AED (ST) was rejected (A/1 and A/2). 5. The order passed by the Commissioner was considered by the Board vide Review Order No. 228R/2003, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N.T.), dated 1-3-1994, which prescribes for availing credit of various duties. According to clause 2, Ist proviso of the notification the credit of specified duty has to be utilised towards payment of duty excise leviable under the Excise Act. Learned counsel has maintained that the aforesaid notification was substituted vide Notification No. 21/99. In the notification duties paid on inputs/capital goods on which credit could be availed be specified alongwith details where the credit could be utilised. He has placed reliance on the circular letter No. 345/18/2000-TRU issued by the CBEC clarifying that BED can be utilised for the payment of Additional Duty of Excise as well. He has drawn our attention to the relevant portion of the aforesaid letter. He has also placed reliance on clarification issued by the Commissionerate in its RAC meeting held on 12-2-2002 wherein it has been observed that credit on BED can be utilised for payment of Additional Excise Duty which fact had been admitted in para 5 of the appeal. In support of his submission, learned counsel has placed reliance on the judgment of Delhi High Court in the case of Parekh Prints (supra) and argued that levy on Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the controversy, reads thus:- "Point No. 2 Whether credit of additional duty (GSI) accrued earlier (piror to 1-3-2003) can be used for payment of Cenvat duty. Comments: In budget 2003, Cenvat Credit Rules were amendment to allow credit of AED(GSI) for payment of Cenvat duty. Prior to 1st March, utilization of credit of AED (GSI) was restricted to payment of AED (GSI) only. The said amendment was carried out consequent to the deletion of Article 272 of the Constitution of India vide Constitution (8th Amendment) Act, 2000(sic) and the issuance of Constitution (Distribution of Revenue) No. 5 Order, 2000, dated 10-10-2000 by the President. As per this order, 1.5% of the total sharable taxes and duties are to be distributed to the states in lieu of AED (GSI) instead of the earlier system of AED (GSI) being distributed amongst the States as per the pattern recommended by the Second finance Commission. Under the new dispensation the requirement of separate accounting of the AED (GSI) no longer exists since 10-10-2000. As the reason for the amendment to Cenvat Credit Rules existed even prior to 1st March. 2003. It was considered appropriate not to put any cap on the use o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een permitted to be cleared under rule 57F of the said Rules." 14. In the present case Notification No. 27/2000-C.E. (N.T.), dated 31-3-2000 would be relevant as it reflects the period post April 2001, which is the period relevant in the present case. 15. The matter does not rest there. The Central Board of Excise and Custom issued a letter from file No. 345/18/2000-TRU, clarifying that credit of basic excise duty can be utilized for the payment of additional duty of excise. The relevant extracts of the said circular are set out hereinunder:- "The issue has been examined. The wording of Rule 57AB(2)(b) states that the credit in respect of the AED (T TA). AED (GSI) shall be utilised, only towards payment of duty of excise on the final products leviable under the said AED (T TA) Act or under the said AED (GSI) Act. The use of the word said establishes a link whereby the credit of AED (T TA) paid on inputs can be utilised for payment of duty under the AED (T TA) on final product and not on AED (GSI) leviable on the final product. The reading of the Commissioner that the rule permits cross utilization of credit under the AED (T TA) Act and AED (GSI) Act is not correct. It may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 402; and CCE v. Kores (India) Ltd. - 1997 (89) E.L.T. 441 (S.C.) = (1997) 10 SCC 338. In para 5 of the judgment rendered in the case of Paper Products Ltd. (supra) Hon'ble the Supreme Court has concluded as under:- "5. It is clear from the abovesaid pronouncements of this Court that, apart from the fact that the Circulars issued by the Board are binding on the Department, the Department is precluded from challenging the correctness of the said Circulars even on the ground of the same being inconsistent with the statutory provision. The ratio of the judgment of this Court further precludes the right of the Department to file an appeal against the correctness of the binding nature of the Circulars. Therefore, it is clear that so far as the Department is concerned, whatever action it has to take, the same will have to be consistent with the Circular which is in force at the relevant point of time." 19. It is, thus, evident that the revenue is precluded from challenging the correctness of the circular even on the ground of the same being inconsistent with statutory provisions. It goes further to limit the right of the revenue to file an appeal against the correctness of the bindin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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