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Raymond Limited Versus The Commissioner, Central Excise and Customs

2015 (3) TMI 659 - BOMBAY HIGH COURT

Cross Utilization of CENVAT Credit - utilisation of AED (T&TA) - Demand of interest and penalty - contravention of the provisions of Rule 3(6)(b) read with Notification No. 24/99CE( NT) dated 1st March, 2000 - wrong utilization of Additional Duty of Excise (T&TA) for the payment of Basic Excise Duty and AED (GOSI) - Malafide intention of evasion of duty - Held that:- any cross utilisation or cross availment is not permissible. Appellant would rely upon the words “the Cenvat Credit may be utilise .....

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of duty of excise specified under the 1978 Act. Appellant's argument, as already held above, fails to take note of the fact that one is the additional duty on goods of special importance, whereas later on is only additional duty on textiles and textile articles.

Independent of this order, the Appellant has addressed us extensively on the construction/interpretation of the Rule 57AB. Once we are not in agreement with the Appellant, then, any further reference to these Rules or decision .....

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8 Act are not one and the same. This aspect is clear if note is taken of the nature of the goods specified in the Schedules to these Acts. As the title indicates one category is of goods of special importance whereas the other is textiles and textile articles. The fact that these goods are separately and distinctly classified in the Schedules to these Acts and equally in the Central Excise Tariff is enough to reject the submissions of the Appellant.

There is no substance in the argume .....

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s or for payment of duty on inputs or capital goods even if the inputs are removed as such or after being partially procured or such capital goods are removed in that State. Hence, Rule 3(6) contains the nonobstante clause and read as above. It does not mean recourse to Rule 3(3) is permissible for cross utilisation.

In fact subsection (3) of section 3 of Additional Duties of Excise (Goods of Special Importance) Act, 1957 was substituted by section 63(a) of the Finance Act, 1994. That .....

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some change does not mean that interest is not leviable and recoverable. In fact, the provisions of Central Excise Act, 1944 and the Rules made thereunder including those relating to refunds, exemption from duty, offences and penalties, shall, so far as may be, apply in relation to levy and collection of the additional duties of excise on the goods specified in section 3(1). Such broad and wide stipulation would definitely include interest.

There is no justification for imposition o .....

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dent : Mr. Pradeep S. Jetly with Mr. S. D. Bhosale JUDGMENT Per S.C.Dharmadhikari, J.) These Appeals involve common questions of law and therefore they were heard together and by consent are being disposed of by this common Judgment. After having perused the impugned order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench at Mumbai dated 2nd January, 2014, we proceed to admit these Appeals on the following substantial questions of law: ( a) Whether in the facts .....

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000 to June, 2001 and not subsequent thereto? (c) Whether in the facts and circumstances of the case, the Appellate Tribunal was right in remanding the proceedings for the recasting of the duty in cash as AED (GOSI)? (d) Whether in the facts and circumstances of the case, the Appellate Tribunal was right in sustaining the penalty under Rule 25 of the Rules? 2) These questions will have to be answered in the following factual background:The Appellant manufactures final product, namely, blanket ou .....

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the inputs (tops etc.) used in or in relation to the manufacture of manmade yarn. With effect from the said date, the Appellants became entitled to avail credit of duty paid on the inputs used in or in relation to the manufacture of blankets falling under Chapter 63. 4) Vide Notification No. 24/94CE (NT) dated 20th May, 1994 issued under Rule 57A, AED(T&TA) paid on input can be utilised for payment of AED(T&TA) on the final product. Similarly, AED(GSI) paid on the input can be utilised f .....

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yrecord fabrics can be utilised for payment of BED on tube being another final product (tyrecord fabric is used in the manufacture of tyre only). This decision in Modi Rubber has been subsequently followed in series of decision namely: (a) SRF Ltd. Versus CCE - 2000 (49) RLT 579 (b) SRF Ltd. Versus CCE - 2002 (147) ELT 851 (c) Madura Coats Versus CCE - 2001 (44) RLT 191 (T) (d) MRF Ltd. Versus CCE - 2004 (164) ELT 202 (T) 6) The fourth proviso to Rule 57F(4) of the erstwhile Central Excise Rules .....

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ctory of production on or after the 16th day of March, 1995. 7) When Modvat Rules were redrafted in lucid manner, similar provisions were contained in provisions to Rule 57F(12). 8) With effect from 3rd September, 1996, the Appellants became entitled to avail credit of duty paid on the inputs used in or in relation to the manufacture of fabrics falling under Chapter 55. 9) The Appellant, inter alia, took the credit of Basic Excise Duty and AED(T&TA) on one of the inputs viz. Manmade tops fal .....

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payable under the Additional Duties of Excise (Goods of Special Importance) Act. 11) The Appellant started manufacturing processed fabrics with effect from March, 1998. The Appellant utilised the credit of BED paid under section 3 of the Act on the tops towards the payment of BED and the additional duty of excise payable under the Additional Duties of Excise (Goods of Special Importance) Act. However, under a mistake of law, the Appellant did not utilise the credit of AED (T&TA) on the tops .....

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the Cenvat Credit (duty paid under various Acts specified in Subrule (1) of 57AB) towards the payment of duty, inter alia, on any final product manufactured by a manufacturer. This also allowed utilisation of the credit of additional duty of excise paid under T&TA Act on the inputs towards payment of other specified duties on any other final products. 14) Rule 57AB(2)(b) provided that AED (T&TA) and AED (GSI) paid on input can be utilised for payment of AED (T&TA) or AED (GSI). This .....

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yester tops during the period from 1st April, 2000 to 30th June, 2001. 16) The AED (T&TA) balance was not utilised by the Appellants till January, 2003. Between January 2003 to April, 2003, the Appellants utilised this AED (T&TA) credit for payment of BED and AED (GSI) to the extent of ₹ 2.9 crores. The dispute in the present appeal relates to this utilisation of AED (T&TA), which was held to be impressible by the Respondent, is sustained by the Appellate Tribunal vide the impu .....

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e, 2001, the Central Government promulgated the Cenvat Credit Rules, 2001 in substitution of Rule 57AA to Rule 57AV providing for Cenvat Credit on inputs. 19) While making the Cenvat Credit Rules, 2001, the Central Government, consciously provided in Rule 3(6)(b) that the credit of additional duties paid under AED (T&A) Act, AED (GOSI) Act, the national Calamity Contingent Duty paid under Section 136 of the Finance Act and additional duty paid under the Customs Tariff Act, the utilisation th .....

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ange Superintendent of Central Excise that in their view the utilisation of credit of duty paid under the T&TA Act for paying other duties was in order, and sought his guidance on the subject. 21) Since no contrary view was expressed by the office of the Range Superintendent, the Appellants utilised the credit upto 30th June, 2001, and lying unutilised Additional Duties of Excise (T&TA) for payment of other specified duties viz. Basic Excise Duty and Additional Duties of Excise (Goods of .....

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utilised under the head additional excise duty paid under the T&TA Act is in contravention of the said subrule and directed the Appellants to pay the said duty amounting to ₹ 2,65,76,666/through PLA. 23) By their letter dated 16th May, 2003, the Appellants replied to the Superintendent's said letter dated 13th May, 2003, inter alia, contending that they are eligible to utilise the credit of duty paid under the T&TA for payment of other duties and that they were not liable to pa .....

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ated 13th August, 2003 the Assistant Commissioner of Central Excise, called upon the Appellants to show cause as to why ( a) the amount of duty of ₹ 2,65,76,666/paid through Additional Duty of Excise (T&TA) should not be disallowed and recovered from them under section 11A of the Central Excise Act, 1944; (b) the amount of duty of ₹ 7,85,336/resulted as short payment of duty on denial of specified duties through additional duty of (T&A) should not be demanded and recovered un .....

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Excise Rules, 2001. It was inter alia alleged in the said notice to showcausecumdemand that the Appellant contravened the provisions of Rule 3(6)(b) read with Notification No. 24/99CE( NT) dated 1st March, 2000, inasmuch as the Appellants had wrongly utilised Additional Duty of Excise (T&TA) for the payment of Basic Excise Duty and AED (GOSI) and intentionally evaded the payment of specified duties. 27) The Appellant by its letter dated 9th December, 2003, submitted a detailed reply to the .....

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th April, 2004, confirmed the demand of ₹ 2,65,76,666/on the Appellant on the ground that the credit of Additional Duty of Excise (T&TA) utilised towards payment of Basic Excise Duty and Additional Duty of Excise (GOSI) was not admissible. However, the Respondent dropped the demand of ₹ 7,85,336/on the ground that the amount was already included in the demand of ₹ 2,65,76,666/. The Respondent further imposed a penalty of ₹ 5,00,000/on the Appellant under Rule 25 of th .....

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nditional waiver of predeposit of the duty demanded and penalties imposed pursuant to order of the Respondent. 31) By its final order No. A/459/WZB/05/CI dated 10th May, 2005, the Appellate Tribunal set aside the demand of Additional Excise Duty of ₹ 66,79,179/holding that there is force in the Appellant's submission that the additional excise duty paid under the Additional Duties of Excise (Textile and Textile Articles) Act, is available for utilisation towards payment of additional e .....

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absence of any finding on the said two contentions as regards the demand of basic excise duty, it has no alternative but to remand the case to the Respondent and accordingly remanded the case to the Respondent for his fresh decision on the Appellant's stand that the Basic Excise Duty liability is not sustainable in view of the Appellant's submission. The Appellate Tribunal further directed the Respondent to pass fresh orders after extending the Appellants a reasonable opportunity of bein .....

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the above matter was argued for some time, counsel for both the parties state that by consent the orders impugned in the appeals be set aside and the appeals be restored to file of CESTAT for denovo consideration in accordance with law. Accordingly, the orders impugned in both the Appeals are set aside and the matters are restored to the file of CESTAT for denovo consideration. 2. Both the appeals are disposed of accordingly with no order as to costs. 3. All contentions of both the parties are .....

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directed the Appellant to pay the credit of AED (T&TA) in cash and take the credit of the said amount and use it for the purpose allowed under the law. The Appellate Tribunal further held that no useful purpose will be served in remanding the proceeding for recasting the accounts as it did not uphold the utilisation of AED (T&TA) for the purpose of AED (GOSI) or BED. The Appellate Tribunal set aside penalty on Mr. R. K. Shriyan. The correctness of the above conclusion on utilisation of .....

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hen consumed in the manufacture and clearance of manmade fabrics. On manmade fabrics, AED(GSI) under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 is levied. However, on manmade fabrics, no AED(T&TA) is leviable. 37) Mr. Sridharan relies upon Notification No. 21 of 1999 issued under Rule 57A of erstwhile Central Excise Rules, 1944. He submits that in terms of this Notification AED (T&TA) paid on input can be utilised for payment of AED (T&TA) on the final pr .....

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can be utilised for payment of said AED(T&TA) or AED(GSI) on any final products manufactured and this position continued upto 30th June, 2001. Mr. Sridharan submits that construing these provisions, the Customs, Excise and Gold Control Appellate Tribunal (CEGAT), in the case of Reliance Industries Ltd. vs. Commissioner of Central Excise reported in 2002 (150) ELT 479 and Grasim Industries Ltd. vs. Commissioner of Central Excise reported in 2003 (54) ELT 288 held that AED(T&TA) can be ut .....

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nuary, 2003 to April, 2003, the Appellant utilised this credit of AED(T&TA) for payment of BED and AED(GSI) to the extent of 2.9 crores. It is this utilisation which is held to be illegal. This orderinoriginal and the confirmation thereof is subject matter of Central Excise Appeal No. 101 of 2014. Mr. Sridharan submits that during the period April, 2000 to June, 2001, the Appellant had paid AED(GSI) in cash of approximately 6 crores on manmade fabrics. 38) Mr. Sridharan submits that the Noti .....

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tional duty of Customs under section 3 of the Customs Tariff Act, 1975 allowed vide clause (b) of SubRule (1) of Rule 57AB utilisation of Cenvat Credit for payment of any duty of Excise on any final products manufactured by the manufacturer. However, by Rule 57AB(2)(b), the position, according to the Revenue and the Tribunal, has undergone a change and in that regard, he has also referred to Rule 3(6)(b) of the Cenvat Credit Rules, 2001, which came into effect on 1st July, 2001. Mr.Sridharan wou .....

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erred the matter to the Larger Bench. In the impugned order, the Appellate Tribunal has relied upon the use of the phrase under the said twice in Rule 57AB(2) to hold that AED(T&TA) could not have been utilised for payment of AED(GSI) even during 1st April, 2000 to 30th June, 2000. In other words, the restriction having come by the insertion of the word respectively after 1st July, 2001, this view of the Tribunal cannot be sustained. 39) Mr. Sridharan has invited our attention to a Division .....

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the Act. The manner of payment of duty and collecting the same are governed by provisions of the Cenvat Credit Rules read with the two Acts. In these circumstances, the reasoning of the Tribunal is exfacie incorrect. Undisputedly, the AED(T&TA) can be paid by utilisation of BED. He relies upon CBEC Circular dated 16th April, 2003. Therefore, there is no substance in the contentions of the Revenue and which are based on an erroneous finding of the Tribunal about distortion of collection/utili .....

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is a balance credit which could be utilised in terms of these Rules, then, the reference is to the Central Excise Rules, 1944 and particularly Rules 57AA to 57AK. Mr. Sridharan submits that the balance credit lying on 1st April, 2000 in AED(T&TA) account can be utilised towards payment of AED(GSI) on final product. If the right vested in a manufacturer in the form of credit is to be utilised upon receipt of the input, then, that is a vested right. It is not a contingent/existing/future right .....

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n of credit of AED(T&TA) and AED(GSI) which is notwithstanding Rule 3(1) and Rule 3(3). Relying upon the wording of Rule 3(7) and the nonPage obstante clause therein, Mr. Sridharan would submit that Cenvat Credit Rules, 2004 have similar SubRules as the 2002 Rules and therefore, between 1st March, 2002 to 9th September, 2004, the credit of AED(T&TA) can be used for payment of any of the specified duty referred to in SubRule (1) of Rule 3. 42) Mr. Sridharan submits that in any event, no p .....

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xtent it directs payment of interest, should be quashed and set aside. 43) Mr. Sridharan has relied upon the following Judgments:( i) Reliance Industries Ltd. vs. CCE 2002 (150) ELT 479 (T) (ii) Grasim Industries Ltd. vs. CCE 2003 (54) ELT 288 (T) (iii) Eicher Motors Ltd. vs. UOI 1999 (106) ELT 3 (SC) (iv) Aunde Faze Three Autofab Ltd. vs. CCE 2009 (6) ELT 564 (v) Innamuri Gopalan vs. State of A. P. 1962 (2) SCR 888 (vi) V.V.S. Sugars vs. Government of A.P. (1999) 4 SCC 192 (vii) Hemraj Gordhand .....

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of the additional duties and their basic distinction. Secondly, the Tribunal has not proceeded by ignoring any binding decision but has given effect to the law which has been brought into effect. The Tribunal thought it fit not to send back the cases because they are fairly old. Once the legal position is clear, then, the Tribunal's order cannot be faulted. The same does not give rise to any substantial question of law. Mr. Jetly therefore submits that the Appeals deserve to be dismissed. M .....

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T, 1957 [ACT NO. 58 OF 1957] [24th December, 1957] An Act to provide for the levy and collection of additional duties of excise on certain goods and for the distribution of a part of the net proceeds thereof among the States in pursuance of the principles of distribution formulated and the recommendations made by the Finance Commission in its Second report dated the 18th December, 1990 BE it enacted by Parliament in the Eighth Year of the Republic of India as follows: SECTION 1. Short title and .....

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oduced or manufactured in India and on all such goods lying in stock within the precincts of any factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto duties of excise at the rate or rates specified in column (4) of the said Schedule. (2) The duties of excise referred to in subsection (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Centra .....

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es among States. SECTION 5. Expenditure to be charged on the Consolidated Fund of India - Any expenditure under the provisions of this Act shall be expenditure charged on the Consolidated Fund of India. SECTION 6. Power to make rules - (1) The Central Government may, by notification in the Official Gazette, make rules providing for the time at which and the manner in which any payments under the provisions of this Act, are to be made, for the making of adjustments between one financial year and .....

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agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule. Similarly, the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 reads as under: ADDITIONAL DUTIES OF EXCISE (TEXTILES AND TEXTILE ARTICLES) ACT, 1978 [ACT NO. 40 OF 1978] [6th December, 1978] An A .....

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excise on certain textiles and textile articles. ( 1) When goods of the description mentioned in the Schedule chargeable with a duty of excise under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable (not being a notification providing for any exemption for giving credit with respect to, or reduction of duty of excise under the said Act on such goods equal to any duty of excise un .....

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on such goods under the Central Excise Act, 1944 (1 of 1944), or any other law for the time being in force and shall be levied for the purpose of Union and the proceeds thereof shall not be distributed among the States. (3) The provisions of the Central Excise Act, 1944 (1 of 1944), and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, so far as may be, apply in relation to the levy and collection of the duties of excise leviable under this sectio .....

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usal of these two Acts would make it clear that the 1957 Act is to provide for the levy and collection of additional duties of excise on certain goods and for the distribution of the part of the net proceeds thereof among the States, in pursuance of the principles of distribution formulated and the recommendations made by the Finance Commission report. 47) The additional duties are defined in this Act under section 2(a) to mean the duties of excise levied and collected under subsection (1) of se .....

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t, 1944 and the Rules made thereunder including those relating to refunds, exemptions from duty, offences and penalties, shall, so far as may be, apply in relation to the levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in subsection (1). 48) The 1978 Act is an Act to provide for a levy and collection of additional duty of excise on certain textiles and textile articles. All the submissions of Mr. Sri .....

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eds thereof shall not be distributed among the States. 49) Now, if one peruses the scheme of credit of duties paid on excisable goods used as inputs under the Central Excise Rules, 1944, one finds that in Rule 57A as was prevailing in 199596 and thereafter until the Notification was issued by the Government, the credit of these duties was not permissible. In that regard, our attention has been invited to the changes brought about by Notifications under Rule 57A of the Central Excise Rules, 1944. .....

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lised towards payment of duty of excise leviable under the Central Excises and Salt Act, 1944 (1 of 1944), on the final products or, as the case may be, on the inputs, if such inputs have been permitted to be cleared under rule 57F of the said Rules: Provided that the credit of specified duty in so far as it relates to the additional duty of excise specified under (ii) above or the additional duty specified under (iv)(b) above, allowed in respect of inputs shall be utilised only towards payment .....

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d only towards payment of duty of excise leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), on the final products or, as the case may be, on the inputs, if such inputs have been permitted to be cleared under rule 57F of the said Rules: ….. 50) Thus, there was no cross utilisation permissible and from the inception. In other words, the credit of specified duties allowed in respect of inputs insofar as it relates to the additional duty of ex .....

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ations clarify is that even if the inputs have not been actually used in the manufacturing of such final products but if the inputs have been used and received in the factory of production on or after 1st March, 1997, the credit can be availed. This is the position even with regard to the further Notifications and which are to be found in the Central Excise Manual of 199798 from page 27 of the compilation. Thereafter, even the Notification dated 28th February, 1999 does not alter this position. .....

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eavy reliance on a Notification bringing about changes and bearing No. 37 of 2000 dated 3rd May, 2000 and a corrigendum dated 13th April, 2000. Rule 57AB reads as under: RULE 57AB CENVAT credit - (1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of, ( i) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said First Schedule), leviable un .....

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) Act, 1978 (40 of 1978); (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and (v) the additional duty leviable under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i), (ii), (iii) and (iv) above, paid on any inputs or capital goods received in the factory on or after the first day of April, 2000. Explanation - For removal of doubts it is clari .....

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ter being partially processed, or such capital goods are removed as such. Explanation - When inputs or capital goods are removed from the factory, the manufacturer of the final products shall pay the appropriate duty of excise leviable thereon as if such inputs or capital goods have been manufactured in the said factory, and such removal shall be made under the cover of an invoice prescribed under rule 52A. (2) Notwithstanding anything contained in subrule (1) ( a) credit of duty in respect of i .....

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Act, 1975 paid on such inputs; (b) credit in respect of ( i) the additional duty of excise under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (ii) the additional duty of excise under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and (iii) the additional duty under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i) and (ii) above shall b .....

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ding drawtwisted or drawwound yarn) of polyesters falling under heading No. 54.02 of the said First Schedule, manufactured by an independent texuriser, that is to say, a manufacturer engaged in the manufacture of texturised yarn (including drawtwisted or drawwound yarn) of polyesters falling under heading No. 54.02, who does not have the facility in his factory (including plant and machinery) for manufacture of partially oriented yarn of polyesters falling under subheading No. 5402.42 of the sai .....

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lability of credit of duty paid on any input or capital goods, the provisions of such other rule or notification shall prevail over the provisions of the rules made under this section. 52) We do not see how, upon a reading of this Rule, the situation has undergone any change from the one noted by us hereinabove. When the Cenvat Credit Rules, 2001 came into force on 1st July, 2001, there as well, by Rule 3, Cenvat Credit was allowed to be taken. 53) Rule 3 of these Rules enables a manufacturer or .....

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leviable under the Act; (ii) the duty of excise specified in the Second Schedule to the Tariff Act, leviable under the Act; (iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (v) the National Calamity Contingent duty leviable under section 136 of the .....

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the Government of India in the Ministry of Finance (Department of Revenue), No. 214/86Central Excise, dated the 25th March, 1986, published in the Gazette of India vide number GSR 547 (E), dated the 25th March, 1986, and received by the manufacturer for use in, or in relation to, the manufacture of final products, on or after the first day of July, 2001. Explanation.For the removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENVAT credit of additional .....

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me excisable. (3) The CENVAT credit may be utilized for payment of any duty of excise on any final products or for payment of duty on inputs or capital goods themselves if such inputs are removed as such or after being partially processed, or such capital goods are removed as such: Provided that while paying duty, the CENVAT credit shall be utilised only to the extent such credit is available on the fifteenth day of a month for payment of duty relating to the first fortnight of the month, and th .....

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able to such goods on the date of such removal and on the value determined for such goods under section 4 or section 4A of the Act, as the case may be, and such removal shall be made under the cover of an invoice referred to in rule 7. (5) The amount paid under subrule (4) shall be eligible as CENVAT credit as if it was a duty paid by the person who removed such goods under subrule (4). (6) Notwithstanding anything contained in subrule (1),( a) CENVAT credit in respect of inputs or capital goods .....

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riff Act, 1975 (51 of 1975) paid on such inputs or capital goods; (b) CENVAT credit in respect of ( i) the additional duty of excise under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (ii) the additional duty of excise under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (iii) the National Calamity Contingent duty under section 136 of the Finance Act, 2001 (14 of 2001); and (iv) the additi .....

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y, 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; (c) The CENVAT credit, in respect of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975), paid on marble slabs or tiles falling under subheading No. 2504.21 or 2504.31 respectively of the First Schedule to the Tariff Act shall be allowed to the extent of thirty rupees per square metre; ( .....

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ant and machinery) for manufacture of partially oriented yarn of polyesters falling under subheading No. 5402.42 of the First Schedule to the Tariff Act. Explanation.Where the provisions of any other rule or notification provide for grant of partial or full exemption on condition of nonavailability of credit of duty paid on any input or capital goods, the provisions of such other rule or notification shall prevail over the provisions of these rules. 54) A bare perusal thereof does not indicate t .....

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rgument of Mr. Sridharan that in payment of additional duties under the 1957 Act, the credit thereof can be obtained so as to enable payment of duty of excise specified under the 1978 Act. Mr. Sridharan's argument, as already held above, fails to take note of the fact that one is the additional duty on goods of special importance, whereas later on is only additional duty on textiles and textile articles. 55) Mr. Sridharan also relied upon Rule 3(6) to urge that the word respectively appeared .....

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respective Acts. The word respectively only denotes the duties of excise leviable under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, Additional Duties of Excise (Goods of Special Importance) Act, 1957 or the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 and the additional duty under section 3 of the Customs Tariff Act, 1975. Therefore, it is not as if the word respectively having been inserted that the position prevailing prio .....

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s that we have set out above, we do not think that any benefit or advantage can be derived from the insertion or introduction of the word respectively . 56) The attempt of Mr. Sridharan is then to rely upon the Cenvat Credit Rules, 2004 and to demonstrate as to how a manufacturer or producer of final products or provider of textile service is allowed to take credit (Cenvat Credit) of the several dues paid on any input or capital goods received in the manufacture of final products or premises of .....

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ril, 2000 to 30th June, 2001. He relied upon the Notifications, but the Notification which he relies, namely, dated 28th February, 1999 has been referred by us above with the specific paras and clauses thereof to conclude that the credit of duty paid on the inputs under AED(T&TA) cannot be utilised for payment of AED(GSI) even during the aforementioned period. We have traced the entire legislative history. Therefore, we are of the view that the Tribunal's conclusion cannot be faulted. Th .....

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ruction/interpretation of the aforereferred Rules. Once we are not in agreement with the Appellant, then, any further reference to these Rules or decisions of the Tribunal is unnecessary. We also need not enter into the controversy as to whether the Tribunal erred in not following or applying its decision in the case of Reliance Industries Limited and Ors. while deciding the Appeals by the impugned order. Once our independent satisfaction enables us to reach the conclusion as above, then, we are .....

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tral Excise Tariff is enough to reject the submissions of the Appellant. 57) We are also of the view that the Division Bench Judgment of this Court in the case of CEAT Limited (supra) cannot be of any assistance. There, the issue was of classification made by section 88 of the Finance Act, 2004 disallowing utilisation of the credit of AED(GSI) paid after 1st April, 1996 but prior to 1st April, 2000 for payment of duty under the first and second Schedule to the Central Excise Tariff Act, 1985, bu .....

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ed by us hereinabove. 58) Then, Mr. Sridharan's reliance on the decisions of the Hon'ble Supreme Court with regard to interpretation of taxing statutes can be of no assistance. We have gone by the plain language of the Cenvat Credit Rules. It is the plain language which enables us to conclude that the availment as sought is not permissible. We have neither made any additions nor subtractions. Therefore, the decisions relied upon by Mr.Sridharan in his written notes/submissions on this po .....

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es and so read, there is no right flowing therefrom to claim such entitlement or availment. Once this conclusion is reached, then, the Judgment of the Hon'ble Supreme Court of India in the case of Eicher Motors Ltd. vs. Union of India reported in 1999 (106) ELT 3 (SC) can be of no assistance. As has been pointed out to us that this Judgment was rendered in the case of taking of credit by the manufacturer/Assessee of duty paid inputs used in the manufacture of tractors falling under Heading N .....

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The credit then can be utilised for payment of duty on any final product manufactured in that factory. That is how the subject Rule providing for lapsing of credit unutilised with the manufacturer of tractors was referred. The Assessee contended that this amounts to taking away a vested right acquired by the manufacturer under the existing law and taking away such right by Rule 57F(4A) is beyond powers of the Central Government. It is in that context that the Revenue's stand was negatived by .....

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n the alternate contention or alternative submission of Mr. Sridharan. Rule 3(3) of the Cenvat Credit Rules, 2002, according to Mr. Sridharan, permitted utilisation of Cenvat Credit for payment of any duty of excise on any final products or for payment of duty on inputs on capital goods themselves, if such inputs are removed as such or after being partially processed or such capital goods are removed as such. Mr. Sridharan submitted that Rule 3(3) was never disturbed nor diluted and the nonPage .....

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e Rules, then, we do not see any force in this argument. We are therefore of the opinion that there is no substance in the argument that between 1st March, 2002 to 9th September, 2004 the credit of AED(T&TA) can be used for payment of any of the specified duty referred to in SubRule (1) of Rule 3. Further, the nonobstante clause appearing in Rule 3(6) is so worded because the entitlement to credit is spelt out in Rule 3(1). Thereafter, Rules 3(2) and 3(3) sets out the mode and manner of avai .....

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also fails to impress us. That argument is based on section 3(3) of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 and similar provision in section 3(3) of Additional Duties of Excise (Goods of Special Importance) Act, 1957. In fact subsection (3) of section 3 of Additional Duties of Excise (Goods of Special Importance) Act, 1957 was substituted by section 63(a) of the Finance Act, 1994. That clearly states that the provisions of Central Excise Act, 1944 (1 of 1944) an .....

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Commissioner of Central Excise vs. Orient Fabrics Private Limited reported in (2004) 1 SCC 597 deals with a case of imposition of penalty or confiscation of goods for non payment of AED(GSI). Recourse to these powers was taken on the basis that provisions of Central Excise Act, 1944 and the Rules made thereunder apply to the levy and collection of AED (GSI). Such is not the case before us. Merely because the language of subsection (3) of section 3 of both Acts has undergone some change does not .....

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n'ble Supreme Court, which holds that in the absence of any substantive provision, interest cannot be levied and charged on delayed payment of tax. We are of the view that the language of section 9A of the Customs Tariff Act and particularly section 9A(8) and section 9(7A) of the said Act cannot be of any assistance. The word interest specifically having not been included, the argument is that no interest was payable by the Appellant on AED(GSI) paid by the Appellants by utilisation of credi .....

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thing erroneous in directing payment of interest. In this regard, the legal position as emerging from the following observations of the Hon'ble Supreme Court in the case of South Eastern Coalfields Ltd. vs. State of M. P. and Ors. Reported in AIR 2003 SC 4482 is eloquent enough. The Hon'ble Supreme Court held as under: ..... 19. Interest is also payable in equity in certain circumstances. The rule in equity is that interest is payable even in the absence of any agreement or custom to tha .....

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e decision of this Court in Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa & Ors. v. Lrs & Ors. (2001)2 SCC 721, wherein the controversy relating to the power of an arbitrator (under the Arbitration Act, 1940) to award interest of prereference period has been settled at rest by the Constitution Bench. The majority speaking through Doraiswamy Raju, J. has opined that the basic proposition of law that a person deprived of the use of money to which he is legitimately entitl .....

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n award interest. 21. Under the English Law, generally speaking, a seller cannot recover interest when the buyer is in default of paying the price, nor can the buyer recover it when claiming a refund of the purchase price. Yet special damages have been held permissible to be awarded in respect of interest paid by the plaintiff as due to the defendant's breach subject to the rule of remoteness. The english Law caused considerable debate in India as well, but the matter was set at rest by the .....

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legal dues by continued litigation. Hence, following principles would also govern the grant of interest. In the same Judgment, the Hon'le Supreme Court held as under: 24. ….. Unless otherwise ordered by the Court, the successful party at the end would be justified with all expediency in demanding compensation and being placed in the same situation in which it would have been if the interim order would not have been passed against it. The successful party can demand (a) the delivery o .....

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such acts as to which the court may from an opinion in any legal proceedings that the Court would not have so acted had it been correctly apprised of the facts and the law. The factor attracting applicability of restitution is not the act of the Court being wrongful or a mistake or error committed by the court; the test is whether on account of an act of the party persuading the Court to pass an order held at the end as not sustainable, has resulted in one party gaining an advantage which it wou .....

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they would have been had the Court not intervened by its interim order when at the end of the proceedings the Court pronounces its judicial verdict which does not match with and countenance its own interim verdict. Whenever called upon to adjudicate, the Court would act in conjunction with what is the real and substantial justice. The injury, if any, caused by the act of the court shall be undone and the gain which the party would have earned unless it was interdicted by the order of the court .....

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