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TMI Blog2014 (10) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturer of Partially Oriented Polyester Yarn (POY), Fully Drawn Yanr of Polyester (FDY) and Draw Texturised Yarn of Polyester (DTY), all falling under heading No. 54.02 of the Central Excise Tariff. POY manufactured by the respondent are captively consumed in the manufacture of FDY and DTY. While the POY is exempt from basic and special excise duty on captive consumption under Notification No. 67/95-CE dated 16/03/1995, no such exemption is available for captive consumption in respect of NCCD, which has to be paid @ 1% advolorem. The DTY and FDY manufactured by the respondent are exempt from NCCD vide Notification No. 46/2003-CE dated 17/05/2003 subject to the condition that they are manufactured from POY on which NCCD is paid. The appellant paid NCCD on POY and took credit of the same in their Cenvat Credit account. The credit so taken was utilized by the respondent when POY was cleared as such from the factory. The adjudicating authority held that the respondent cannot simultaneously claim exemption under Notification No. 46/2003-CE and take credit of the duty paid on POY captively consumed and accordingly denied the Cenvat Credit of NCCD taken on POY, which were captively co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the matter may be referred to a larger Bench. 6. We have carefully considered the submissions made by both the sides. 6.1 Rule 3 of the Cenvat Credit Rules provides for taking of Cenvat Credit and its utilization. Though NCCD is a specified duty on which credit can be taken under Rule 3 (1) (v), under sub-rule (7) of the said Rule, there is a restriction in the utilization of NCCD credit taken. The relevant extract of the said Rule is re-produced verbatim below:- 7) Notwithstanding anything contained in sub-rule (1) and sub-rule (4),- (a) ........................................................................................... (not relevant) (b) CENVAT credit in respect of - (i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (ii) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); (iii) the education cess on excisable goods leviable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he credit of the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) paid on or after the 1st day of April, 2000, may be utilised towards payment of duty of excise leviable under the First Schedule or the Second Schedule to the Excise Tariff Act; (c) the CENVAT credit, in respect of additional duty leviable under section 3 of the Customs Tariff Act, paid on marble slabs or tiles falling under tariff items 2515 12 20 and 2515 12 90 respectively of the First Schedule to the Excise Tariff Act shall be allowed to the extent of thirty rupees per square meter; Explanation.- Where the provisions of any other rule or notification provide for grant of whole or part exemption on condition of non-availability of credit of duty paid on any input or capital goods, or of service tax paid on input service, the provisions of such other rule or notification shall prevail over the provisions of these rules. 6.2 Notification No. 46/2003-CE dated 17/05/2003 grants exemption from National Calamity Contingent Duty (NCCD) on goods falling under 54.02, if they are manufactured fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 67/95-CE and also availed exemption in respect of NCCD on yarn cleared to 100% EOU under Notification No.1/95. The question which came up for consideration was whether simultaneous benefit of two notifications, one under 67/95 and another under 1/95 could be availed or not. This Tribunal came to the conclusion that they cannot do so and held that the demand for NCCD credit is sustainable in law. This decision does not support the case of the respondent at all and in fact supports the case of the Revenue. Similarly, in the case of Mahindra & Mahindra Ltd. (cited supra), the question related to availment of Cenvat Credit in respect of inputs, which were exclusively used in the manufacture of exempted products and demand of Cenvat Credit so taken. The Tribunal came to the conclusion that Cenvat Credit cannot be taken when the inputs are utilized for the manufacture of exempted products. Therefore, this decision of the Tribunal also does not support the case of the respondent. Since none of the decisions relied upon are relevant or applicable, the question of reference to a larger Bench also does not arise. The lower appellate authority has wrongly relied upon these dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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