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TMI Blog2015 (9) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... them is Nylon Tyre Cord Fabric ('NTCF' for short), which is procured from various sources. NTCF is further processed in the factory of the respondents to make Dipped Nylon Tyre Cord Fabric ('DNTCF' for short), which is captively consumed in the manufacture of tyres. 4. Respondents were taking CENVAT credit of the Additional Excise Duty (Rs. AED' for short) paid on NTCF under Section 3 of the Additional Duties of Excise (Good of Special Importance) Act, 1957. Prior to 01.03.2003, credit of AED could be used only for payment of AED on any final product manufactured and cleared from their factories. Since AED was not payable on their final product, viz., tyres, the respondents were having accumulated credit of AED. In so far as the respondent in C.E.Appeal No.2/13 is concerned, they had accumulated credit of Rs. 9,39,19,737/- and in so far as the respondent in C.E. Appeal No.3/13 is concerned, they had accumulated credit of Rs. 5,41,28,449/-. 5. While so, as a result of an amendment to the CENVAT Credit Rules 2002, the respondents were entitled to utilise the accumulated credit of AED for payment of Basic Excise Duty (BED) and Special Excise Duty (SED) on their f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase and allowed the appeals. These appeals are filed by the department which is aggrieved by the orders passed by the Tribunal. 10. A reading of the order passed by the Tribunal shows that it has placed total reliance on the order of the Tribunal, Mumbai in the case of CCE Mumbai v. CEAT Ltd. [(2010) 254 ELT 349]. The impugned order also shows that the department's representative before the Tribunal fairly acknowledged that the two issues were covered by the Tribunal's decision in the case of CEAT Tyres. 11. The relevant part of the Tribunal's order extracted in the impugned order, reads thus: "5. We have perused the case records and carefully considered the rival submissions. The common case of the parties is that the assessee-CEAT had procured tyre cord fabrics paying AED (GSI) and used in the manufacture of its final product automotive tyres. As tyres and flaps did not attract AED (GSI) and since the relevant modvat/cenvat provisions prohibited utilization of AED (GSI) for discharge of BED payable on tyres and flaps, credit of such AED paid on inputs could not be utilized and accumulated in its account. As per Rule 3(6)(b) of CCR, Cenvat credit in respect of, int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord fabrics prior to 1-4-2000. As on 1-3-2003, the assessee had a total credit of about Rs. 32,78,21,329/-, out of which an amount of Rs. 20,49,01,087/- had been earned prior to 1-4-2000. Had the Rule 3(6)(b) of C.C.R. not been amended with effect from 1-3-2003, the assessee would have continued to have a balance of Rs. 32,78,21,329/- including Rs. 20,49,01,087/- earned prior to 1-4-2000. Since the Finance Act, 2004 prohibited use of AED (GSI) for payment of BED, the credit balance of AED (GSI) would remain undisturbed in its account. During July, 2005 to June, 2006, the assessee had paid an amount of Rs. 65,54,373/- every month from AED (GSI) and later discharged the same liability by payment of duty from PLA. We find that credit is intended to be spent only to pay duty. The department had not recognized debits from AED (GSI) as payment of BED. Therefore, such debits cannot be held to have affected the balance of AED (GSI) in the accounts of the assessee. Therefore, once the appellant discharged the duty liability on tyres by debiting PLA, the appellants account stood credited with the debits initially made. A refund claim is warranted when duty is excess paid. In the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of duty from their PLA, the RG. 23A account had to be credited with the amount debited earlier. 8. We find that the judicial authorities cited by the appellants are to the effect that once the utilization of Modvat/Cenvat credit for payment of duty was found to be irregular and the duty was then paid from PLA, the assessee became automatically entitled to credit of equivalent amount in its RG 23A account. 11. We find that the Tribunal had dealt with a different dispute in Final Order No. M/159/08/SMB/C-I, dated 9-7-2008 in the case of BDH Industries Ltd. [2008 (229) E.L.T. 364 (Tri.-LB)]. In the said decision, the Tribunal had considered two cases : (a) Motorola India Pvt. Ltd. [2006 (193) E.L.T. 468 (T) = 2007 (7) S.T.R. 613 (T) = 2005 (71) RLT 334] In this case the appellant had paid excess duty by mistake and thereafter sought permission to take credit of the amount paid by mistake. The Tribunal held that the amount involved was not duty and limitation did not apply for its refund. (b) Comfit Sanitary Napkins (I) Pvt. Ltd. - 2004 (174) E.L.T. 220. In this case it was held that the assessee cannot suo motu take credit without applying for refund, when excess d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' case shows that the issues raised in these appeals, were exactly similar and therefore the Tribunal justified in proceeding on the basis that the controversy raised before it was covered by the Tribunal's order in CEAT Tyres case. It is also seen that the order of the Delhi Tribunal in Good Year India's case was confirmed by the High Court of Punjab and Haryana in C.E.A.No.140 of 2006, by its judgment dated 25.01.2007. Though, SLP was filed by the department against this judgment of the High Court that was rejected by the Apex Court on the ground of delay and keeping the question of law opened, by its order dated 10.03.2008. 13. Learned counsel for the appellants relied on explanation added to Rules 3(7)(b) of the CENVAT Credit Rules 2004 and contended that the utilization of accumulated credit on AED for payment of AED is regular. To answer this contention, reference to Explanation to the Rule has to be made and the explanation added reads thus: "Explanation - For the removal of doubts, it is hereby declared that the credit of the additional duty of excise leviable under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1956 (58 of 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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