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TMI Blog2012 (5) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... red to be utilized for payment of duty in respect their final clearance. The balance duty was required to be paid in cash. 3. As the appellant did not take the credit of duty paid on furnace oil, the said credit could not be utilized by them, thus resulting in payment of duty to the extent of Rs.41,71,424/- by cash, through PLA. The said duty so paid by them was subsequently refunded to them. 4. It is seen that the appellant subsequently took modvat credit on 14.8.09 thereafter the said credit was utilized by them for payment of duty on their final product cleared and balance was paid through PLA. As such, less duty was paid through PLA in August, 2009, thus resulting in less refund of duty paid in cash. 5. The proceedings were initiated against the appellant by way of issuance of show cause notice dt.28.10.10. The notice proposed the denial of credit of Rs.45,72,156/- availed by the appellant on 14.8.09, i.e. after three and half years on receipt of furnace oil in their factory. The notice further alleges that the appellant should have taken the credit of the above amount during the period April, 05 to March,09 and should have utilized the same for payment of duty on their fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that such credit was utilized in the subsequent period, thus reducing the quantum of cash payment. The Tribunal observed that the entire situation is revenue neutral. It was also noted by the Tribunal that interpretation which defeat the purpose of the notification should be avoided. In the present case, we find that the credit was not availed by the appellant at all and question of utilization does not arise, whereas in the Tribunal's decision referred supra, the credit was availed and was lying unutilised. Inspite of that the Tribunal observed that the entire situation is revenue neutral. Applying the ratio of the above decision, we are of the view that the applicant has been able to make out a good case in their favour so as to allow the stay petition unconditionally. 8. Apart from above, we find that the demand stands confirmed against the applicant by invoking the longer period of limitation. Our attention was also drawn to the letter dated 17.8.09 addressed to the Superintendent of Central Excise by the assesses indicating that credit of Rs.44,54,275.00 in BED. Rs.89,086.00 in ECESS & Rs.28,795.00 stands availed by them vide entry dated.14.8.09 in their Credit Regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ....... cleared from' a unit located in......, from so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts as is equivalent to the duty payable on value addition undertaken in the manufacture of the said goods by the said unit " "2A In cases where all the goods produced by a manufacturer are eligible for exemption under this notification, the exemption contained in this notification shall be subject to the condition that the manufacturer first utilizes whole of the CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and pays only the balance amount in cash." 13. It is also to be noted that Cenvat credit of duties paid on inputs is not intended to be refunded in cash, except in a situation where such credit is used for export. Tribunal has also proclaimed a law that if a manufacturer closes down his operation then he can get refund of Cenvat credit in cash. Now let us take a case where a manufacturer in Jammu does not take Cenvat credit for first one year of operation when he has no exports. He pays duty liability through PLA and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by Member (Judicial) is for the period prior to 01-04-2008 when the provisions in the notification was amended. So in my opinion the decision by Member (Judicial) has the effect that once a law is proclaimed by Tribunal it will continue not withstanding any change in enacted law. 18. So in my view pre-deposit should be called for at least in respect of excess exemption availed for the period after 01-04-08. 19. POINT OF DIFFERENCE OF OPINION Whether the pre-deposit is to be waived on the basis of revenue neutrality assessed by Member (Judicial) or pre-deposit should be called for considering that express provisions of notification as in force after 01-04-08 has been violated as assessed by Member (Technical) (Pronounced on....................) (Archana Wadhwa) Member (J) (Mathew John) Member (T) 20. The registry is directed to place the matter before the competent authority to take steps to resolve the above difference of opinion. (Pronounced on 12.3.2012) Archana Wadhwa (Member Judicial) Mathew John (Member Technical) Per: D N Panda: 21. While hearing the interim application by the Division Bench on 15/2/2012 (disposed on 12/3/2012) the dispute as to whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CE, Jammu vs. New India Wire and Cable - 2008 (232) ELT 681 (Trib. Delhi) applies to order waive pre-deposit. So also it was noticed that extended period of limitation was invoked by show cause notice dated 28.10.2010. 25. Aforesaid proposition of learned judicial Member was not agreeable to learned Technical Member. He opined that the appellant was a manufacturer having manufacturing facility at various locations in India for which it was very puzzling how the appellant forgot to take credit on furnace oil used in Jammu alone. Narrating different circumstances in Para 13 of the order, it was viewed by him that there was no decision available to held that the assessee can adopt its own practice contravening express provisions of law to plead revenue neutrality. In Para 16 of the order it was stated that the wordings of the notification was explicit to grant exemption only to the extent of duty liability (discharged through PLA) if Modvat credit available for set off was insufficient. Tribunal is expected to go by law what that governs the exemption since claimant was required to first exhaust Modvat credit available towards duty liability. On these premises, prima-facie view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandate of notification was that Modvat credit was necessarily required to be first set off against duty liability in respect of the finished goods. According to the notification if quantum of modvat credit available was only insufficient, the deficient amount was to be discharged through PLA to get refund of that amount only because input credit was not at all intended to be refunded by the Notification. According to him any other construction of the notification shall unduly enrich an assessee at the cost of Revenue. The appellant did not utilise Modvat credit available to it during the period of April 2005 to March, 2009. But making deposits through PLA, entire amount was taken back as refund. It chose to enjoy the accumulated Modvat credit after tax holiday period to the detriment of justice. It is an admitted fact that the appellant collected public money to the extent of duty permitted to be set off against Modvat credit available to it during tax holiday period and took back the same as refund keeping the Modvat credit in fact for undue enjoyment in future which was not permissible in law. Had the appellant utilised the Modvat credit to discharge its duty obligation, the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to public policy since exemption to the extent of input credit available for set off was not intended to be refunded by law. Utilisation of modvat account meets immediate scrutiny and no right to defer such scrutiny is choice of assessee. Failure to exercise right to set off of Modvat credit duly during tax holiday period extinguishes such right in absence of any authority under law to carry forward unutilised Modvat credit to a future date for set off. 32. The notification in question having limited the exemption (refund) to duty paid only on incremental value of output through PLA, exemption (refund) of duty on input component contained in finished goods is not permitted. Claim of Modvat credit during material period being mandate of law, failure to seek set off thereof duly, debars exemption (refund) and right to claim that at a future date is deniable. It may be stated that when inputs extinct upon use in manufacture of the finished goods, deferment of set off of Modvat credit is not permitted. No right is vested with the assessee to carry forward input credit beyond material period in absence of carry forward provision in the Notification in question. Apart from this, no c ..... 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