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2015 (12) TMI 1211 - GUJARAT HIGH COURT

2015 (12) TMI 1211 - GUJARAT HIGH COURT - 2016 (332) E.L.T. 242 (Guj.) - 100% EOU - payment of duty at the time of debonding - Revenue directs Assessee to pay duty in cash whereas assessee wants to pay through CENVAT Credit - Held that:- In case of similarly situated persons, namely, M/s Alps Chemicals Pvt. Ltd. and others, as stated in paragraph-9 of the memorandum of petition, the respondent authorities have permitted them to discharge the excise duty foregone from the Cenvat credit account in .....

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lying in stock in their factory from the Cenvat credit account. In paragraphs 9 and 14 of the memorandum of petition, the petitioners have clearly stated the names of various parties in whose cases the Ahmedabad Commissionerate has permitted payment of excise duty from the Cenvat credit account. - Besides, the petitioner company is a reputed well established Pharmaceutical Company and hence, the interest of the revenue is in no manner jeopardized if the interim relief, as prayed for, is granted, .....

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r favour.

When different companies situated in different regions of the country, are granted a particular benefit, the petitioner therein which was situated in Gujarat, was also entitled to the similar treatment. As noted hereinabove, various assessees, including the assessees situated within the jurisdiction of Ahmedabad Commissionerate have been given benefit of paying the excise duty foregone from the Cenvat credit account. Under the circumstances, prima facie, there appears to be .....

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Paresh M Dave, Adv For the Respondent : Mr R J Oza, Adv ORDER ( Per : Honourable Ms. Justice Harsha Devani ) 1. By this petition, the petitioners have called in question the orders/letters dated 03.08.2015 and 19.08.2015 (Annexures F and I to the petition) of the second respondent, directing the petitioners to pay excise duty in cash and has prayed that the petitioners be permitted to pay such excise duty from legally availed CENVAT credit. 2. The petitioner No.1, a Company, is engaged in the bu .....

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EZ has allowed the petitioners application for partial de-bonding in principle, but a certificate of confirmation of discharging duties foregone on the goods lying unutilized in the petitioners plant that was proposed to be de-bonded had to be obtained from the office of the second respondent. Accordingly, there was exchange of correspondence between the petitioners and the second respondent. After the quantity, value and duties foregone (which were required to be discharged by the petitioner co .....

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g in the plant proposed to be debonded shall be discharged from legally availed Cenvat credit lying with the petitioner because excise duties could be discharged by a manufacturer on the goods manufactured by him from such Cenvat credit. 3. By the impugned letter dated 03.08.2015, the second respondent called upon the petitioners to pay the excise duty foregone in cash and not from the Cenvat credit by referring to rule 3(4) of the Cenvat Credit Rules, 2004. The petitioners, thereafter, made a r .....

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/s AIA Engineering Ltd., Odhav, Ahmedabad and M/s Harsha Engineering Ltd., Village Moraiya, where such payments were allowed from legally availed Cenvat credit. It was submitted that an EOU is also a manufacturer and therefore, all the benefits allowed to any manufacturer under the Central Excise law are admissible to an EOU also at the time of de-bonding. An EOU is also allowed to avail Cenvat credit of duties paid on capital goods, inputs and taxable services and therefore, an EOU at the time .....

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o reason why the petitioner should not be allowed the same facility. It was contended that the insistence on the part of the second respondent herein that the petitioner should pay excise duty in cash is not only unjustified, but is also discriminatory, warranting intervention by this court. 4.1 Mr. Dave further submitted that the petitioners have, therefore, made out a prima facie case for grant of interim relief in its favour. On the question of balance of convenience, it was submitted that th .....

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cial difficulties and liquidity crunch. It was contended that when similarly situated persons have been granted the benefit of payment of excise duty from the Cenvat credit, the act of the respondents in not extending similar treatment to the petitioners amounts to discrimination and hence, the petitioners are entitled to invoke the writ jurisdiction of this court against the impugned orders/letters. 4.2 In support of his submissions, the learned counsel placed reliance upon the decision of this .....

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ecision of the Madras High Court in the case ofCommissioner of Central Excise, Salem v. Cheran Spinners Ltd., 2014 (33) STR 148 (Mad.) , the decision of the Karnataka High Court in the case of Commissioner of Service Tax, Bangalore v. Aravind Fashions Ltd., 2012 (25) STR 583 (Kar.) , the decision of the Punjab and Haryana High Court in the case of Commissioner of Central Excise, Chandigarh v. Nahar Industrial Enterprises Ltd., 2012 (25) STR 129 (P&H) , and the decision of the Himachal Prades .....

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re devoid of any merit and that the petitioners are not entitled to any interim relief, as prayed for. It was submitted that no prima facie case has been made out by the petitioners, inasmuch as, the inputs utilized in manufacture of final products have been exported out of India and the capital goods have been rendered to nil value due to depreciation or removed to any other 100% EOU under 100% EOU scheme and hence, there was no liability of duty. It was submitted that the duty foregone on proc .....

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d be given precedence as compared to the interest of the petitioner who is an individual. It was submitted that no irreparable injury would be caused to the petitioners if the petitioners are required to pay the central excise duty foregone in cash instead of paying from the Cenvat credit account. It was, accordingly, urged that the petition being devoid of merit, deserves to be dismissed and no interim relief, as prayed for, deserves to be granted. 6. The facts as emerging from the record clear .....

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mmissioner in connection with the request for No Due Certificate for debonding of Exit out of 100% EOU Scheme by one M/s Alps Chemicals Pvt. Ltd., which clearly shows that the said unit has been permitted to discharge excise duty for indigenously procured duty paid raw materials lying in stock in their factory from the Cenvat credit account. In paragraphs 9 and 14 of the memorandum of petition, the petitioners have clearly stated the names of various parties in whose cases the Ahmedabad Commissi .....

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ers should be denied such benefit. Besides, the petitioner company is a reputed well established Pharmaceutical Company and hence, the interest of the revenue is in no manner jeopardized if the interim relief, as prayed for, is granted, whereas the petitioner company would have to face a cash crunch if called upon to pay the excise duty foregone in cash, whereas its Cenvat credit account would remain unutilized. Besides, as pointed out by the learned counsel for the petitioners, ultimately the e .....

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