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TMI Blog2009 (4) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1957 Act'). However, the revenue has claimed that the following substantive questions of law would emerge from the order of the Tribunal: "1. Whether Cenvat credit earned on account of Basic Excise Duty can be utilised towards payment of Additional Duty of Excise (ST) leviable under the Additional Duty of Excise (Goods of Special Importance) Act, 1957; 2. Whether Additional duty of Excise (S.T.) is included in the expression any 'duty' mentioned in any 'duty of excise' whereas the provisions of erstwhile Rule 57AB(1)(b) C.E. Rules, 1944 provide that the CENVAT credit can be used for payment of any 'duty of excise"? Facts 2. For the sake of convenience, we refer facts from CEA No. 54 of 2004. The dealer-respondent are engaged in the manufacture of 100% cotton yarn and 100% cotton Denim Fabrics falling under Chapter 52 of the 1st Schedule to the Central Excise Tariff Act, 1985 and were availing the facility of Cenvat credit. The goods manufactured by the dealer-respondent attract duty of excise under Section 3 of the Central Excise Act, 1944 and Additional Duty of Excise (S.T.) under the 1957 Act. During the year 2001, dealer-respondent had exported cotton denim fabrics on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and A/2). 5. The order passed by the Commissioner was considered by the Board vide Review Order No. 228R/2003, dated 30-6-2003, ordering that an appeal be preferred against the order of the Commissioner (A.3). Accordingly the appeal was filed before the Central Excise Service Tax Appellate Tribunal which was rejected on 17-2-2004 by observing that there is no condition specified in Rule 57AB of the Rules which provides that Basic Excise Duty or Special Excise Duty cannot be used for payment of Additional Duty of Excise (Goods of Special Importance Act) (A.4) 6. Mr. Kamal Sehgal, learned counsel for the revenue has vehemently submitted that BED is levied under the Excise Act whereas Additional Excise Duty is levied under the 1957 Act. According to the learned counsel both the enactments are different and credit of Basic Excise Duty cannot be utilised for Additional Excise Duty. He has maintained that the word 'duty' has been defined by Rule 2(7) of the Rules, which means duty payable under Section 3 or Section 3A of the Act. He has maintained that as per Section 2A of the Act reference to expression duty, duties, duty of excise and duties of excise must be construed to include re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance on the judgment of Delhi High Court in the case of Parekh Prints (supra) and argued that levy on Additional Excise Duty was upheld with the observation that the 1957 Act does not leave any doubt that additional duty was levied as duty of excise and has referred to Entry 84 of the Union List and in any case to Entry 97 of that list. It was in the aforesaid ground that the levy of additional duty was upheld. Decision 9. After hearing learned counsel for the parties and perusing the record with their able assistance we feel that it would first be necessary to read the provisions of Rule 57(AB)(l)(b) of the Rules. The aforesaid provision was incorporated by amendment with effect from 1-4-2000, which highlights the intention of the Parliament. The Rule reads, thus:- "57AB Cenvat credit - (1) (b). - The Cenvat credit may be utilized for payment of any duty of excise on any final products manufactured by the manufacturer or for payment of duty on inputs or capital goods themselves if such inputs are removed as such or after being partially processed, or such capital goods are removed as such." 10. A perusal of the above Rule shows that Cenvat credit could be utilized for payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existed even prior to 1st March. 2003. It was considered appropriate not to put any cap on the use of the AED (GSP credit accruing prior to 1-3-2003 in the said credit rules. It is accordingly clarified that credit of additional duty (GSI) accrued earlier (piror to 1-3-2003) can be used for payment of Cenvat duty as well as AED (GSl)." (emphasis added). 12. We are further of the view that the amendment, which has been made in Rule 57(AB) of the Rules by using the expression of 'any duty of excise' is significant and intentional. In the earlier Notification No. 5/94-C.E. (N.T.), dated 1-3-1994, it was specifically provided that credit can be utilized only for payment of duty of excise leviable under the Excise Act. The amendment has been made with an intention to allow the dealer-assessee to utilize the credit of basic excise duty for payment of additional excise duty. The aforesaid view is supported by the Division Bench judgement of the Gujarat High Court rendered in the case of Maheshwari Mills Limited v. Union of India - 1992 (58) E.L.T. 9. It has been held that the narrow construction on the expression duty occuring in Rule 2(v) cannot be accepted to mean only 'duty' of excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s utilization of credit under the AED (T&TA) Act and AED (GSI) Act is not correct. It may be submitted that as under the old rule so under the new rule as well, the credit in respect of BED paid on any inputs or goods can be utilised for payment of additional duty on the final product under the AED (T&TA) Act as well as AED (GSI) Act. However, credit of AED Act cannot be utilised for payment of BED on the final product. To sum up the CENVAT rules provide for: (a) utilization of credit in respect of BED for payment of additional duty under the AED (T&TA) or AED (GSI) on the final product. (b) utilization of credit in respect of AED (T&TA) only for payment of additional duty on the final product under the AED (T&TA) Act. (c) utilization of credit in respect of AED(GSI) only for payment of additional duty on the final product under the AED (GSI) Act" (emphasis added) 16. It is, thus, clear that the additional duty of excise could be paid by utilizing the credit of basic excise duty. 17. The Chandigarh Commissionerate in its Regional Advisory Committee (RAC) meeting held on 12-2-2002 has also clarified that the credit of basic excise duty can be utilised for payment of additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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