TMI Blog2014 (10) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... tion shall prevail. Simultaneous availment of duty exemption and benefit of cenvat credit militates against the very object of NCCD levy and would lead to huge leakages in revenue. Therefore, the impugned order is not sustainable in law. Accordingly we set aside the same and hold that the appellant is liable to reverse the credit taken along with interest thereon as correctly held in the adjudicating authority's order. However, since the issue relates to interpretation of law, imposition of penalty is not warranted. Accordingly, we set aside the penalty imposed - Decided partly in favour of Revenue. - Appeal No.E/102/07 - Final Order No. A/466/2014-WZB/C-II(EB) - Dated:- 30-6-2014 - Shri R. Periasami, J. P R Chandrasekharan and Anil Choudhary, JJ. For the Appellant : Shri Ahibaran, Addl. Comm. (AR) For the Respondent : Shri Gajendra Jain, Adv. JUDGEMENT Per: P R Chandrasekharan: 1. Revenue is in appeal against Order-in-Appeal No. SVS/331/NGP-II/2006 dated 19/10/2006 passed by Commissioner of Central Excise Customs (Appeals), Nagpur. 2. Vide the impugned order, the learned lower appellate authority has set aside the duty demand of ₹ 2,30,30,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent has availed benefit of duty exemption from NCCD under Notification No. 46/2003, they could not have taken credit and utilise the same for payment of duty on POY cleared as such, as that would amount to availing double benefit, once by way of exemption on FDY and DTY and twice by way of payment of duty on POY cleared as such, utilizing the credit taken. According to the Revenue, this amounts to recycling of inadmissible credit. 4. The learned Additional Commissioner (AR) appearing for the Revenue reiterates the grounds taken in the appeal and prays for setting aside the impugned order. 5. The learned Counsel for the respondent submits that there is no one to one co-relation required to be established between input and out put under the Cenvat Credit Rules and therefore, utilization of credit for payment of NCCD on goods cleared as such, is permissible in law. It is also argued that DTY and FDY are not fully exempted goods as they are liable to Basic and Special Excise Duty and therefore, the credit taken on NCCD is permissible. Reliance is also placed on the decisions of this Tribunal in the case of CCE, Vapi Vs. Silvasa Industries Pvt. Ltd. - 2009 (247) ELT 677 (Tri-Ahmd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods leviable under section 91 read with section 93 of the Finance (No. 2) Act, 2004 (23 of 2004), or the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007) or the additional duty of excise leviable under section 157 of the Finance Act, 2003 (32 of 2003), or the education cess on taxable services leviable under section 91 read with section 95 of the Finance (No.2) Act, 2004 (23 of 2004) , or the Secondary and Higher Education Cess on taxable services leviable under section 136 read with section 140 of the Finance Act, 2007 (22 of 2007), or the additional duty of excise leviable under Section 85 of Finance Act, 2005 (18 of 2005) respectively, on any final products manufactured by the manufacturer or for payment of such duty on inputs themselves, if such inputs are removed as such or after being partially processed or on any output service Provided that the credit of the education cess on excisable goods and the education cess on taxable services can be utilized, either for payment of the education cess on excisable goods or for the payment of the education cess on taxable services: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be entitled to take NCCD credit and get a refund of the same, as export goods are not exempted goods. Similarly, in the SRF case, the issue for consideration was whether the credit of AED paid on captively consumed goods, could be utilised for payment of AED on goods cleared for home consumption. The said decision pertained to erstwhile Central Excise Rules, 1944 and Rule 57 F (12) provided that notwithstanding anything contained in Rule 57A and Notification issued thereunder, the credit of specified duty allowed in respect of any inputs may be utilized towards payment of duty of excise on any other final products, whether or not any such input is actually utilized in the manufacture of such other final products, if the said inputs have been received in the factory of manufacture on or after 1 st day of March 1997. However, in the Cenvat Credit Rules, 2002 2004, which are applicable to the present case, similar provisions do not exist and therefore, the ratio of the said decision cannot be applied to the facts of the present case. As regards the Modern Petrofils case relied upon by the respondent the facts were that the appellant therein availed exemption in respect of NCCD o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated ad infinitum, taking credit of the duty paid thro' credit, thereby negating the very levy itself. It is a settled position in law that law cannot be interpreted in such a way so as to defeat its object. In New India Sugar Mills Ltd. vs. Commissioner of Sales Tax, Bihar [AIR 1963 SC 1207, p1213], the hon'ble Apex Court held that It is a recognized rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and which effectuate the object of legislation. In Carew Company vs. Union of India [AIR 1975 SC 2260, p 2270], the hon'ble Apex Court once again reiterated the said principle in the following words Therefore, when two interpretations are feasible, the court will prefer the remedy and suppress the mischief as the Legislature envisioned. Viewed from this perspective, simultaneous availment of duty exemption and benefit of cenvat credit militates against the very object of NCCD levy and would lead to huge leakages in revenue. Therefore, the impugned order is not sustainable in law. Accordingly we set aside the same and hold that the appellant is lia ..... 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