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TMI Blog2015 (4) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... 978 exempts the goods other than those specified in Annexure I of the Notification, from the duty of excise chargeable under Section 3 of Central Excise Act, 1944 and additional duty of excise chargeable under Additional Duty of Excise (Goods of Special Importance) Act, 1957 [hereinafter referred to as AED (GSI)] and under Additional Duty of Excise (Textile and Textile Articles) Act, 1978 [hereinafter referred to as AED (T&TA)], to the extent these duties have been paid through PLA after utilising the Cenvat credit available at the end of the month for payment of duty to the extent possible. This exemption notification was, however, applicable to the eligible goods manufactured and cleared from the units located in the areas specified in Annexure II of the exemption Notification. This notification was applicable to the new industrial units which commenced commercial production on or after 14th June, 2002 and also to the industrial units existing before 14th June, 2002 which had undertaken substantial expansion by the way of increase in installed capacity by not less than 25% on or after 14/6/02 or have made new investment on or after 14/6/02 and such new investment is directly attr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/08-CE dated 27/3/08 and Notification No. 34/08-CE dated 10/6/08. In terms of these amendments the exemption was restricted to the duty of excise or AED (GSI)/AED (T&TA) payable on the value addition undertaken in the manufacture of the eligible goods or the duty paid through PLA in respect of the goods cleared during a month after payment of duty to the extent possible by utilising Cenvat credit available at the end of the month, whichever is lower. The notification also prescribed the percentage of value addition for different final products. Thus if the duty paid in respect of the clearances made during a month through PLA after payment of duty to the extent possible by utilising the Cenvat credit available at the end of the month, is more than the duty payable on the value addition at the rate prescribed in this notification, the benefit of exemption would be restricted to the duty of the value addition at the rate as prescribed in this notification. However, the amended notification also had a provision that a manufacturer availing of this exemption will have option not to avail the rates of value addition as specified in this notification and apply to the Jurisdictiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, was not restricted to the units located in any specified area and was applicable to the goods manufactured and cleared from any unit located in the State of Jammu & Kashmir. This exemption notification was applicable to the new industrial units which commenced production on or after 06/2/10 and also to the industrial units existing before 06/2/10 which had either undertaken substantial expansion of installed capacity by not less than 25% on or after 06/2/10 or have made new investment on or after 06/2/10 and such new investment has resulted in generation of additional regular employment of not less than 25% over and above the base employment limit, subject to the conditions mentioned in the notification. This exemption notification also had a provision that a manufacturer availing of this exemption may opt not to avail of the value addition rates as prescribed in this notification and may apply to the Jurisdictional Commissioner of Central Excise for fixing special rates of value addition if in his case the actual value addition is 115% or more of the value addition specified in the notification. In this notification also the actual value addition was to be calculated in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o avail the value addition of 36% specified in the exemption notification. Against this order of the Commissioner, appeal No. E/54271/14 EX (DB) has been filed. In this appeal the appellant have also claimed to be eligible for Notification No. 56/02-CE. 2. Heard both the sides. 3. S/Shri Bipin Garg, Advocate and Jatin Singhal, Advocate, proxy counsel for Shri Rupesh Kumar, representing the appellant, pleaded that during the period of dispute, both the Notifications No. 56/02-CE dated 14/11/02 as well as the subsequent Notification No. 1/10-CE dated 06/2/10 were applicable to the units located in the areas specified in Notification No. 56/02-CE, that the appellant s unit had commenced commercial production in March, 2012 and is located in the area specified under Notification No. 56/02-CE, that just because by mistake the appellant wrote to the Jurisdictional Commissioner, Central Excise for fixation of special rate of value addition under Notification No. 1/10-CE, they cannot be denied the benefit of Notification No. 56/02-CE, that though the amending Notification No. 19/08-CE dated 27/3/08 and 34/08-CE dated 10/6/08 restricted the benefit of exemption Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 56/02-CE is applicable to them, they cannot get the benefit of the judgment of Jammu & Kashmir High Court in the case of M/s Reckitt Benckiser vs. Union of India (supra) as that judgment is applicable only to those assessees who had set up the manufacturing unit in the specified areas during the period prior to the 27/3/08, while this is not so in this case, that since in this case the appellant had commenced commercial production in March 2012 and had opted for Notification No. 1/2010-CE dated 06/2/10 by requesting the Jurisdictional Commissioner to fix special rate of value addition, they have to abide by the Commissioner s decision and they cannot claim exemption equal to 100% of the duty paid through PLA in the manner specified in this notification. He, therefore, pleaded that there is no infirmity in the impugned orders passed by the Commissioner. 5. We have considered the submissions from both the sides and perused the records. 6. The Notification No. 56/02-CE dated 14/11/02 issued in accordance with the industrial policy 1998-2003 promulgated by the State of Jammu & Kashmir exempted the goods covered by this exemption notification and manufactured in the areas specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment issued a new Notification No. 1/2010-CE dated 06/2/10 which was applicable to the same goods to which the Notification No. 6/02-CE was applicable, the only difference being that this exemption notification was applicable to all the manufacturing units located in the State of Jammu & Kashmir and the exemption benefit was not confined the goods manufactured by the units in certain specified areas. This notification also restricted the benefit of the exemption only to the duty payable on the value addition at the rates specified in the notification or the special rates fixed by the Commissioner on the assessee s request or the duty paid through PLA in respect of the clearances made during a month after utilising to the extent possible the Cenvat credit available at the end of the month, whichever is lower. However, after issue of this notification, Hon ble Jammu & Kashmir High Court vide its judgment dated 23/12/10 in respect of the writ-petition filed by M/s Reckitt Benckiser quashed the amendment made to the Notification No. 56/02-CE by Notification No. 19/08-CE dated 27/3/08 and 34/08-CE dated 10/6/08. The effect of this judgment is that under Notification No. 56/02-CE appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notification. Against this order dated 01/4/14 the second appeal has been filed. In respect of the both the appeals, the appellant s plea is that since their unit is located in the area specified under Notification No. 56/02-CE and since they, by mistake, had applied to the Commissioner for fixing special rate under Notification No. 1/2010-CE and since Notification No. 56/02-CE is more beneficial to them in view of the judgment of Hon ble Jammu & Kashmir High Court in the case of M/s Reckitt Benckiser vs. Union of India (supra), they should be allowed to avail of exemption Notification No. 56/02-CE and in this regard rely upon the Apex Court s judgment in the case of Share Medical Care vs. Union of India (supra), wherein the Apex Court has held that even if an applicant does not claim benefit under a particular notification at initial stage he is not debarred, prohibited or estoppels from claiming such benefit at a later stage. The plea of the learned DR, however, is that the judgment of Hon ble Jammu & Kashmir High Court in the case of M/s Reckitt Benckiser vs. Union of India (supra) is in respect of writ-petition filed by M/s Reckitt Benckiser and this judgment would not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they had applied to the Commissioner for special rate of value addition under Notification No. 1/2010-CE. 10. If the appellant, however, opt for the Notification No. 1/2010-CE, the question of determination of special rate of value addition by the Commissioner would come. This rate has to be calculated on the basis of the formula prescribed in the Explanation to para 5 of the notification. In this regard, we do not find any mistake in para 17 of the order-in-original dated 31/5/12 passed by the Commissioner as the value addition has been determined as the difference between the sale value excluding excise, sales tax and other indirect taxes during 2011-12 (Rs. 1,05,11,690/-) and cost of raw material and packing material consumed (Rs. 32,30,184/-). Accordingly, the percentage of value addition has been determined as - 10511690 -3230184 X 100 10511690 = 69.27% Appellant s contention is that the value of raw material and packing material should be taken as nil as no Cenvat credit has been taken in respect of the same. This plea of the appellant is not correct as in Explanation to para 5 of the notification, what is to be deducted is - (a) cost of raw materials and packing materi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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