TMI Blog2016 (5) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... h, 2003 and March, 2004 that appellant has indicated the NCCD CENVAT Credit taken by the appellant. Appellant has also given a list of all the input materials and their registration numbers. It is also observed from the covering letters filing ER-1 returns that even photo copies of Cenvatable invoices were also submitted to the department by the appellant. Therefore, five year’s extended period of demand cannot be invoked against the appellant. However, the entire demand is not time barred as the period of demand is 11/5/2001 to 31/3/2006 and the show cause notice is issued on 10/08/2006. The CENVAT credit taken within the normal period of limitation is not admissible to the appellant and is required to be paid alongwith appropriate interest under Section 11AB of the Central Excise Act, 1944. Imposition of penalty - Held that:- the issue involved in the present appeal was a case of interpretational dispute. All the relevant facts and provisions of CENVAT Credit Rules were known to the department also. Periodical audits of the appellant’s unit were also done by the Internal Audit parties of the department. If department could not raise doubts about the admissibility of credit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01/2002 and 2004 respectively as per clause 2 of Notification No. 27/2001-CE. That Rules 10/12 of the Cenvat Credit Rules are only clarificatory and do not debar NCCD credit to the appellant. Learned Advocate relied upon the case law of Welspun Gujarat Stahl Rohren Ltd. Vs. UOI [2010 (254) E.L.T. 551 (Guj.)] to argue that ratio of this case law is squarely applicable to the present facts. That SLP filed by the Revenue against this order has been dismissed by Apex Court as per citation 2010 (256) ELT a 161 (S.C.). That as per the following case laws the duty is deemed to be paid even if subsequently refunded under an area based exemption notification:- (i) CCE, Jallandhar Vs. Kay Kay Industries [[2013 (295) E.L.T. 177 (S.C.) (II) CCE, Chennai-I Vs. CEGAT, Chennai [2006 (202) ELT 753 (Mad.)] 2.2 That as per case law CCE, Mumbai Vs. Indorama Synthetics (I) Ltd. [2014 (307) ELT 805 (Tri-Mumbai)] if there is a conflict between the provisions of the Rules the provisions of a notification then the provision of Notification will prevail and this it is a settled proposition that law cannot be interpreted in such a way to defeat its object. 2.3 That demand is partly time b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision of Rule 10 or Rule 12 will prevail over general provisions of Rule 3 or Rule 10 of CENVAT Credit Rules. Learned Special Counsel relied upon Gujarat High Court s decision in the case of Adani Power Ltd. Vs. U.O.I. [2015 (330) ELT 883 (Guj.)] 4) Heard both sides and perused the case records. The issue involved in the present proceedings is whether appellant will be eligible to take CENVAT Credit of NCCD paid on input Panmasala received by the appellant from the suppliers who availed the benefit of Notification No. 27/2001-CE dated-11/5/2001.It is the case of the appellant that CENVAT Credit on NCCD is admissible as per Rule 3 (1) (v) of the CENVAT Credit Rules and that provision of Rules 10 or Rule 12 of the CCR 2001/02 CCR 2004 being clarificatory, will not have any application as Notification No.27/2001-CE is also issued to extend area based benefit to the manufacturer. Appellant has claimed that CENVAT Credit of NCCD is admissible to them as per the provisions of Rule 3 (1) (V) of the CENVAT Credit Rules.It is also observed that as per Rule 6 of the CENVAT Credit Rules, no credit of the duty on inputs is admissible if the end product stands exempted. Under area base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2002] or No. 57/2002-Central Excise, dated the 14th November, 2002 [ GSR 765 ( E ) dated the 14th November, 2002] or notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 ( E ), dated the 25th June, 2003] or 71/2003-Central Excise, dated the 9th September, 2003 [ G.S.R. 717 ( E ), dated the 9th September, 2003, the CENVAT credit on such inputs or capital goods shall be admissible as if no portion of the duty paid on such inputs or capital goods was exempted under any of the said notifications. 4.2 A plain reading of the above Rules reveal that area based exemptions 32/99-CE 33/99-CE, both dated 8/7/1999, are mentioned alongwith other area based exemptions. Some of the exemption notifications specified in these Rules are issued much after Notification No. 27/2001-CE dated-11/5/2001. The exclusion of Notification No. 27/2001-CE from Rule 12 of CCR 04 is thus deliberate. Further Notification No. 27/2001-CE is an independent exemption Notification and not an amendment to Notification No. 32/99-CE or 33/99-CE. The provision of Rule 12 of CCR 04 is a special dispensation wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input materials and their registration numbers. It is also observed from the covering letters filing ER-1 returns that even photo copies of Cenvatable invoices were also submitted to the department by the appellant. In view of the existing factual matrix, five year s extended period of demand cannot be invoked against the appellant. However, the entire demand is not time barred as the period of demand is 11/5/2001 to 31/3/2006 and the show cause notice is issued on 10/08/2006. The CENVAT credit taken within the normal period of limitation is not admissible to the appellant and is required to be paid alongwith appropriate interest under Section 11AB of the Central Excise Act, 1944. 8. So far as imposition of penalty upon the appellant is concerned, it has already been observed above that extended period is not invokable. Further, the issue involved in the present appeal was a case of interpretational dispute. All the relevant facts and provisions of CENVAT Credit Rules were known to the department also. Periodical audits of the appellant s unit were also done by the Internal Audit parties of the department. If department could not raise doubts about the admissibility of credit th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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