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2016 (11) TMI 991 - CESTAT MUMBAI

2016 (11) TMI 991 - CESTAT MUMBAI - TMI - Demand - CENVAT credit of NCCD paid on Partially Oriented Polyester Yarn (POY) consumed captively for manufacture of DTY - benefit of N/N. 46/2000-CE dated 17/05/2003 - Rule 14 of the Cenvat Credit Rules read with Section 11A of the CEA, 1944 - Held that: - reliance placed on the decision of the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI Versus INDORAMA SYNTHETICS (I) LTD [2014 (10) TMI 675 - CESTAT MUMBAI] where similar issue was decided and it was .....

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cenvat credit militates against the very object of NCCD levy and would lead to huge leakages in revenue. Therefore, the impugned order is not sustainable in law. Accordingly we set aside the same and hold that the appellant is liable to reverse the credit taken along with interest thereon as correctly held in the adjudicating authority's order. However, since the issue relates to interpretation of law, imposition of penalty is not warranted. - Appeal allowed - decided in favor of Revenue. - .....

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captively for the manufacture of DTY. The appellants were paying NCCD on the POY consumed captively and were availing credit of the same. The said credit was used to pay NCCD on the FDY manufactured by them from the POY consumed captively. Notification No.46/2000-CE dated 17/05/2003 exempted DTY from the NCCD. A demand notice was issued seeking to recover an amount equivalent to ₹ 19,19,855/- in terms of Rule 14 of the Cenvat Credit Rules read with Section 11A of the CEA, 1944 along with i .....

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enue is in appeal before this Tribunal. 2. The learned AR place the decision of the Tribunal in the respondent s own case. The Tribunal in the said case cited as 2014 (307) ELT 805 has observed as follows: 6.2 Notification No. 45/2003-C.E., dated 17-5-2003 grants exemption from National Calamity Contingent Duty (NCCD) on goods falling under 54.02, if they are manufactured from goods falling under same heading 54.02. The purpose of exemption is that there is no double levy of duty (NCCD) on goods .....

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ly clear that if there is a conflict between the provisions of this rule and provisions of notification, the provisions of notification shall prevail. 6.3 Reliance placed by the respondent on the decisions (cited supra) is of no assistance as the facts in those cases are distinguishable. In Silvasssa Industries case, the dispute related to credit of NCCD taken on input (POY) used in the production of finished goods, which were exported. In that context, it was held that if the finished product i .....

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thereunder, the credit of specified duty allowed in respect of any inputs may be utilised towards payment of duty of excise on any other final products, whether or not any such input is actually utilised in the manufacture of such other final products, if the said inputs have been received in the factory of manufacture on or after 1st day of March, 1997. However, in the Cenvat Credit Rules, 2002 & 2004, which are applicable to the present case, similar provisions do not exist and therefore, .....

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ications, one under 67/95 and another under 1/95 could be availed or not. This Tribunal came to the conclusion that they cannot do so and held that the demand for NCCD credit is sustainable in law. This decision does not support the case of the respondent at all and in fact supports the case of the Revenue. Similarly, in the case of Mahindra & Mahindra Ltd. (cited supra), the question related to availment of Cenvat credit in respect of inputs, which were exclusively used in the manufacture o .....

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e to the conclusion that the respondent is eligible to avail exemption on the basis of duty payment on inputs and also simultaneously take credit on the said inputs, which could be utilised for payment of NCCD on some other inputs cleared as such. This would amount to availing double benefit, once by way of exemption from NCCD on the finished product under Notification No. 46/2003 and secondly by way of utilization of credit on POY cleared as such. Such grant of double benefit negates the very p .....

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