TMI Blog2010 (8) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant. [Order per : Rakesh Kumar, Member (T)]. The facts giving rise to this appeal are, in brief as under : 1.1 The respondents are manufacturer of Vulcanised Rubber chargeable to Central Excise Duty under sub-heading 4007.00 of Central Excise Tariff Act and during the period of dispute, they were availing of the SSI exemption under Notification No. 8/99-C.E., dated28-2-99for which they had filed the necessary declaration. Under Notification No. 8/99-C.E., first clearances of specified goods in a financial year starting from 1st day of April upto the value of Rs. 50 lakhs were fully exempt from duty and clearances of specified goods with aggregate value of Rs. 50 lakhs, immediately following the first clearances worth Rs. 50 lakhs were chargeable to duty at concessional rate of 5% ad valorem. This exemption notification, however, was subject to certain conditions as mentioned in para 2 of the Notification. While condition No. (iv) of this notification was that the manufacturer shall not avail the credit of duty under Rule 57A or 57B of Central Excise Rules paid on inputs used in the manufacture of specified goods for home consumption, the aggregate value of fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g capital goods Cenvat credit and that just because the respondent utilized capital goods Cenvat credit amounting to Rs. 1228/- for payment of duty on the consignment cleared under Invoice No. 52 dated 25-5-99 and that happened due to mistake of their clerk, they cannot be denied the benefit of SSI exemption in respect of all the clearances of value upto Rs. one crore starting from 1st April, 1999. The Additional Commissioner accordingly confirmed the duty demand of Rs. 3931/- and imposed penalty of equal amount on the respondent and dropped the remaining demand. On a review appeal being filed by the Department against this order of the Addl. Commissioner, the Commissioner (Appeals) vide order-in-appeal No. 107-C.E./GZ8/04, dated13-8-04upheld the Additional Commissioner s order and rejected the Department s appeal. It is against this order of the Commissioner (Appeals) that the present appeal has been filed by the Revenue. 2. None appeared for the respondent. 2.1 Heard learned DR. Shri R.K. Verma, assailed the impugned order by reiterating the grounds of appeal and pleaded that one of the conditions for availing the exemption under Notification No. 8/99-C.E. is that the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declaration made in the said Finance Bill under the Provisional Collector of Taxes Act, 1931 (16 of 1931), the force of laws, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts clearances, specified in column (2) of the Table below, (hereinafter referred to as the said Table) for home consumption, of excisable goods of the description specified in the Annexure appended to this notification (hereinafter referred to as the specified goods), from so much of the aggregate of - (a) the duty of excise specified thereon in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and (b) the special duty of excise specified thereon in the Second Schedule to the said Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table. TABLE S.No. Value of clearances Rate of duty (1) (2) (3) 1. First clearances upto an aggregate value not exceeding Fifty lakh rupees made on or after the 1st day of April in any financial year Nil 2. Clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an aggregate value of rupees twenty lakhs under this notification. Thereafter he wants to opt for the exemption contained in Notification No. 9/99-C.E., dated28th Feb., 99. He is permitted to do so. (ii) a manufacturer also has the option to not avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall not be withdrawn during the remaining part of the financial year. Illustration I : A manufacturer who has exercised his option to pay the normal duty on any goods during a financial year makes clearances having an aggregate value of rupees twenty lakhs. He thereafter wants to avail the exemption under this notification. He is permitted to do so. He is entitled under this notification to full exemption on additional clearances of an aggregate value of rupees thirty lakhs and further clearances of an aggregate value of rupees fifty lakhs at the concessional rate of five per cent ad valorem. Illustration II : A manufacturer who has been paying the normal duty on any goods during a financial year opts to avail of this exemption after making clearances having an aggregate value of rupees seventy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for availing the exemption, the manufacturer has to give his option in writing and once such option has been given, the same will not be allowed to be withdrawn during the remaining part of the financial year except when the option is with regard to switch over to Notification No. 9/99-C.E., dated 28-2-99 under which in respect of the clearances of specified goods upto rupees one crore starting from 1st April, duty is liable to be paid, though at a concessional rate but with the benefit of input duty credit. In this case, the respondent had opted to avail of the exemption under Notification No. 8/99-C.E., where the clearances starting from 1st April and upto Rs. 50 lakhs are fully exempt from duty and the next clearances worth Rs. 50 lakhs attract duty at a concessional rate of 5% ad valorem. However, this exemption is available subject to the conditions mentioned in para 2 and condition No. (v) of this Notification is that the manufacturer does not utilize the capital goods Cenvat credit for payment of duty in respect of his clearances upto Rs. one crore in respect of which the benefit of exemption is being availed. There is no dispute about the fact that only on one occasion i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lfilment of those conditions would result in denial of exemption. Hon ble Supreme Court in case of Eagle Flask Industries Ltd. v. C.C.E, Pune reported in 2004 (171) E.L.T. 296 (S.C.) has held that conditions of the exemption notification have to be fulfilled for claiming its benefit. In this case, though the Appellant subsequently paid the duty, initially paid through capital goods Cenvat credit account on26-5-99, in cash in Nov., 1999, the fact remains that during the period when the exemption was being availed, the duty was paid by utilizing capital goods Cenvat credit in violation of the conditions of the notification. The judgment of Hon ble Supreme Court in case of Chandrapur Magnet Wires (P) Ltd. (supra) is not applicable to the facts of this case as in the case of Chandrapur Magnet, the proportionate Cenvat credit in respect of exempted finished products was being reversed before clearance of the exempted finished product and reversal of Cenvat credit in this manner was held by the Apex Court as amounting to not taking the Cenvat credit and thereby satisfying the condition for exemption, while in this case, the duty payment by debiting the capital goods Cenvat credit account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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