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C.C.E., & S.T. -Ludhiana Versus Khanna Paper Mills Ltd.

2015 (9) TMI 1380 - CESTAT NEW DELHI

Denial of CENVAT Credit - Whether the respondents are entitled to Cenvat credit of Education cess and Secondary & Higher Education cess when inputs are supplied by 100% EOU, paying duty under Sr. No. 2 Notification No. 23/2003-CE dated 31.3.2003 - Held that:- When goods have been removed from EOU to DTA, availing the exemption under Sr. No. 2 of Notification No. 23/2003 (ibid) there is a restriction carved out by the formula provided in the proviso to Rule 3(7)(a). This restriction is to prohibi .....

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r judgement noted above, was rendered prior to the amendment inserting the second proviso to Rule 3(7) (a), the principle enunciated therein alongwith the other judgments are correctly applicable to the present case. The legislature in its wisdom has brought forth the amendment of adding the second proviso to Rule 3(7)(a) w.e.f. 7.09.2009 to suppress the mischief, clear the confusion and resolve the same. Therefore I do not find any reason not to allow the Cenvat credit on the Education Cess and .....

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(E/ 54487/2014) and the Cross Objections filed by the assessee (E/55849/2014) are together disposed by this Final Order. 2. The issue posing for consideration is whether the respondents are entitled to Cenvat credit of Education cess and Secondary & Higher Education cess when inputs are supplied by 100% EOU, paying duty under Sr. No. 2 Notification No. 23/2003-CE dated 31.3.2003. 3. The respondents are engaged in manufacture of paper & paper board and are also availing Cenvat credit of t .....

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d and was finalized by the Order-in-Original which confirmed the demand and imposed penalty along with interest. Aggrieved the respondents filed appeal before the Commissioner (Appeals) who held the issue in favor of the Respondents and also set aside the imposition of penalty. However, the amount of ₹ 8,49,215/- deposited under protest was appropriated as the Respondents had submitted that this amount was availed in excess due to mistake in calculation.The Revenue is in appeal challenging .....

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he respondents were entitled to avail Cenvat credit of only ₹ 8,25,35,358/-. That therefore the Respondents have availed an excess Cenvat credit of ₹ 37,45,509/-.The allegation of excess availment of Cenvat credit is on the premises that the Cenvat credit admissible should be calculated as per formula prescribed in Rule 3(7)(a)and that the Additional Customs duty/CVD mentioned in the Rule means only basic excise duty and does not include the Education Cess and SHE cess paid as part o .....

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to conversion as an EOU. For the period 13.05.2007 to 17.07.2007 the said goods were cleared by RIL without availing exemption of duty under Sr.No.2 of Notification No.23/2003-CE dated 31.03.2003. Thus for the above two periods there was no need to resort to the Rule 3(7)(a) of the Cenvat Credit Rules. In this appeal, the Revenue has confined the allegation to the period 18.07.2007 to 1.11.2008 and the alleged excess availment of Cenvat credit is ₹ 27,14,745/-. It is also the case of Reve .....

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ed undertaking or by a unit in an Electronic Hardware Technology Park or in a Software Technology Park other than a unit which pays excise duty levied under Section 3 of the Excise Act read with serial numbers 3,5,6 and 7 of Notification No. 23/2003-Central Excise dated the 31st March, 2003 -in case the unit pays excise duty under Section 3 of the Excise Act read with serial number 2 of the Notification No. 23/2003-Central Excise, dated the 31st March, 2003 [G.S.R. 266(E), dated the 31st March, .....

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undertaking or by a unit in Electronic Hardware Technology Park or in a Software Technology Park, as the case may be, on which such unit pays excise duty under Section 3 of the Excise Act read with serial number 2 of the Notification No. 23/2003-Central Excise dated 31st March, 2003 [G.S.R. 266(E), dated the 31st March, 2003] shall be equal to X multiplied by {1+BCD/400) multiplied by (CVD/100)} 7. As per proviso to Section 3(1) of Central Excise Act, 1944, if the goods are manufactured by an EO .....

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ducation Cess and SHE cess. All manufacturers, including EOU, are required to pay other duties of excise levied under different Acts like the Additional duty of Excise under Textile and Textile Articles Act, Goods of Special Inportance Act, NCCD, Education Cess and SHE Cess. Under the Notification No.24/2003(ibid) the levy of additional duty of excise under Textiles & Textile Articles Act and Goods of Special Importance Act are exempted when cleared from EOU. Consequently the other levies of .....

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itional Customs duty (CVD) component. As already stated, Additional Customs duty includes excise duty as well as cess on this excise duty. Therefore the respondents are entitled to take credit of an amount equivalent to the Additional Customs Duty inclusive of excise duty and cess thereon. 9. The position has been well clarified and settled in Emcure Pharmaceuticals Ltd. Vs. CCE 2008 (225) ELT 513 (Tri.-Mum.) The respondents also relied on the judgements rendered in Jai Corp Ltd. Vs. CCE 2014-TI .....

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