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TMI Blog2011 (5) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... LA. Such duty paid by the assessee out of PLA is required to be refunded to them subsequently in terms of said Notification No.39/2001-CE, dt.31.7.01. 2. It is also seen that the appellants cleared the same final product i.e. pipes under exemption Notification No.6/2002-CE, dt.1.3.02 as amended by Notification No.47/2002-CE, dt.6.9.02 without payment of duty. The said clearances were initially effected by them to their sister unit located at Gandhidham, where the same underwent the process of coating. The coated pipes were ultimately cleared to M/s Larsen & Toubro and M/s Punj Lloyd Ltd., who were engaged in execution of water treatment of plant and supply of water from its sources to the storage. In terms of provisions of Rule 6, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempted goods. It is also seen that the assessee, usually takes a stand that instead of paying 8% of the value of the exempted goods, they are ready to reverse the MODVAT Credit so involved. Their stand is accepted by the Tribunal as also by Hon'ble High Courts in various decisions and it stand held that such reversal of MODVAT Credit would satisfy the condition of provision of Rule 6 requiring that no MODVAT Credit should have been availed on such inputs and such reversal amounts to the fact that no credit has been availed, thus the demand of 8% of the value of final exempted product made in terms of provisions of Rule 6(3)(b) stand set aside. 4. However, the position in the present case is different. It is seen that 8% of the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the following grounds. 6. Whereas, as per the provisions of Notification No.39/2001-CE, dt.31.7.01 as amended, the amount of CENVAT Credit was required to be exhausted first prior to utilization of the amount from PLA. If the Noticee had not reversed excess credit of Rs.28,27,768/-, they would have not paid equal amount through PLA against the duty liability on subsequent removal of goods cleared under benefit of Notification No.39/2001. Noticee had reversed the excess amount of CENVAT Credit of Rs.28,27,768/-, which resulted in excess refund of Rs.28,27,768/- being duty paid through PLA against duty liability on subsequent removal of goods cleared under benefit of Notification No.39/2001-CE, dt.31.7.01. Therefore, the said amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same very grounds which were raised before the lower authorities. On the other hand, the learned SDR appearing for the Revenue submits that the above modus operandi was adopted by the assessee with a view to pay more duty from their PLA and to subsequently seek refund of the same. He has also drawn our attention to the fact that inasmuch as the Kach notification is no more applicable now, the said assessee has started discharging duty on the exempted goods by paying 5% of the value of the exempted goods from CENVAT account. By referring to Hon'ble Gujarat High Court decision in the case of CCE Ahmedabad Vs. M/s Maize Products as reported in 2009 (234) ELT 431 (Guj.), he submits that it was only because of the fact that the demand of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the provisions of Notification No.39/2001, the said reversal would not be applicable. As such, we do not find any justification for the Revenue to insist on debiting their CENVAT Credit @ 8% of the value of the exempted product instead of reversal of actual amount of MODVAT Credit of duty relatable to the inputs so used. 10. Even if we view the problem from another angle, we note that with excess reversal of MODVAT Credit amount of Rs.28 lakhs (Rupees Twenty Lakhs) approx., the appellants are required to pay more duty out of PLA. For payment of duty out of PLA, they are first required to deposit in cash and take the entries in cash. As such, the appellants were required to deposit an amount of Rs.28 lakhs (Rupees Twenty Lakhs) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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