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Commissioner of Central Excise & S.T., Rajkot Versus M/s. Ratnamani Metals & Tubes Limited

Area based exemption - refund of duty paid in cash - revenue contended that cenvat credit availed on GTA service was not available and therefore to be reduced from refund claim - Benefit of Notification No. 39/2001-CE dated 31.07.2001 - Held that:- Benefit of exemption notification would be extended on the condition that manufacturer first utilise the whole of credit available to them and pays only balance amount by cash, which is refundable. In the instant case, according to the adjudicating au .....

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credit and Commissioner (Appeals) observed that the exemption notification would apply only in respect of utilisation of the CENVAT credit. It is further observed that if at all, there is a case of wrong utilisation of CENVAT credit, right course of action would have been initiation of proceedings under the provisions of Central Excise Act, 1944 read with Cenvat Credit Rules, 2004. There is no dispute that, no proceeding was initiated for deduction of CENVAT credit, therefore, benefit of the ex .....

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the extent of deduction of claim from the PLA amount and allowed the appeal filed by the Respondent with consequential relief. 2. None appears on behalf of the Respondent. There is no application for adjournment. 3. After hearing the learned Authorised Representative and on perusal of the records, we find that the respondents were engaged in the manufacture of Stainless Steel Pipes (Welded and Seamless) and Carbon Steel Pipes (Saw Pipes and ERW pipes) classifiable under Chapter 73 of the schedu .....

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impugned order, Commissioner (Appeals) allowed the appeal filed by the respondents as stated above. 4. The main contention of the learned Authorised Representative on behalf of the Revenue is that, Clause 1A of the notification stipulates that the manufacturer first utilise the whole of the CENVAT credit for the goods cleared during such months and pays only the balance amount in cash which is refundable. It is contended that the Respondent erroneously availed CENVAT credit for payment of servic .....

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ting authority has rightly deducted the amount. 5. We reproduce below Clause 1A of the notification, as under:- 1A In cases where all the goods produced by a manufacturer are eligible for exemption under this Notification, the exemption contain in this Notification shall be available subject to the condition that, the manufacturer first utilize whole of the CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and p .....

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ision of the Hon'ble Gujarat High Court in the case of CCE & Cus. vs. Parle Products Pvt. Limited 2010 (258) ELT 485 (Guj.). The other issue is that the adjudicating authority disallowed CENVAT credit utilised for outward transportation. No proceeding was initiated against the denied cenvat credit and Commissioner (Appeals) observed that the exemption notification would apply only in respect of utilisation of the CENVAT credit. It is further observed that if at all, there is a case of wr .....

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ecision to restrict the claims of the appellant on the ground of irregular availment/ utilisation of CENVAT credit on GTA outward transportation service, I find that, if at all there is a case of wrong utilisation of CENVAT credit, the lower authority has to initiate action and invoke the provisions of CENVAT Credit Rules and decide independently, but the lower authority cannot deny the refund of amount paid from PLA under any of the provisions as the scheme under the notification. The dispute o .....

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credited. I further find that, the lower authority in his re-credit order No. 39/2006-07 has also deducted the claim of the appellant to the extent of ₹ 1,616/- which was stated to be over-payment through PLA and not refundable under the notification. This finding of the lower authority also appears to be incorrect in as much as the notification allows the manufacturer, on exercising his option, to take credit of the amount of duty paid during the month under consideration, in his account .....

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