TMI Blog2018 (1) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... .M. Sharma, learned AR for the Revenue, we find that the appellant is engaged in the manufacture of pesticides. Prior to 1.4.2005, two notifications, granting exemption to Small Scale Industries were holding field. In terms of Notification No.8/03-CE dated 1.3.2003, small scale assessee was entitled to the benefit at nil rate of duty subject to the conditions that he will not avail credit. Another notification No.9/03-CE dt.1.3.2003, provided the concessional rate of duty i.e. 16% of tariff rate, if the assessee avails credit. 2. The appellant had chosen to pay duty in terms of notification No.9/03-CE dt.1.3.2003 and as such they were availing the credit were paying duty @ 60% of the tariff rate on their final products It so happened that Notification No.09/03-CE was received with effect from 6.4.2005. As the appellant did not realise the rescinding of the said notification, they continued to avail credit and discharge duty @ 60% of the normal rate during 1.4.2005 to July, 2006. 3. Subsequently, a show cause notice was issued to them on 12.06.2007 raising the demand from 1.4.2005 to July, 2006, alleging that with the rescinding of Notification No.9/03-CE, concessional rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no condition of opting for the said notification though the same bars opting out, once availed. In terms of para 2 (1) of the Notification No.8/03-CE, the exemption is available subject to the following conditions: 2. The exemption contained in this notification shall apply subject to the following conditions, namely: - (i) a manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such shall not be withdrawn during the remaining part of the financial year. 9. As it is be become clear that the option was available to the assessee to avail exemption contained in the notification and to pay normal rate of duty on the goods cleared by them. It becomes clear that if the assessee does not want to avail the benefit of said the Notification no.8/030-CE, it could opt out the same. There was no condition for opting for the notification though the same provided for opting out of the notification. As the appellant paid duty on the final products in terms of notification No.9/03-C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for raising differential duty. Tariff rate applicable was @ 16% and after availment of 60% concession, 9.6% of the tariff rate, the duty was paid at the balance rate. The said demands stands confirmed raising demand of 40%. Whatever credit was availed stand utilized by them for payment of 60% of duty. However, if any balance credit is available the same stands reversed by the appellant which leads to a situation where the entire credit so availed by the appellant stand either utilized for payment of 40% tariff rate or stands reversed and is not available with the appellant. It can be concluded that no credit stands availed by them so as to benefit them at any point of time. It will amount to Revenue neutral situation as credit availed by the appellant would become nil and as such the condition of the Notification No.8/03-CE, stands fulfilled by the assessee. Instead of raising differential duty, at full rate of duty, the Revenue should have extended the benefit of Notification No..8/03-CE to the assessee. As such, we are of the view that confirmation of duty against the assessee along with confirmation of interest and imposition of penalty is not warranted. Accordingly, the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfil the conditions thereof is entirely on the appellant. I also find that the Commissioner (Appeals) has given the finding that the appellant was filing classification list/declaration with the department and no objection was raised. There can be no quarrel with his observation that the Revenue was not required to respond to the declaration, which was not required to be filed. 16. I find that the Notification No.8/03-CE is subject to the following conditions: 2. The exemption contained in this notification shall apply subject to the following conditions, namely :- (i) a manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year; (ii) while exercising the option under condition (i), the manufacturer shall inform in writing to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h they had opted to avail the exemption for both their products but had paid duty at normal rate for a limited period in respect of one of the products whereas in the instant case the party had opted for the benefit of a notification, which had been rescinded. Besides, system of classification list did not exist in impugned period. As the facts and circumstances are completely incomparable, the ratio in that case does not support the contention of the noticee. 20. In the case of Chhabra Tubes Products (supra), it was affirmed that the neither buyer nor the assessee, had taken the Cenvat credit under modvat scheme. Hence, the matter was remanded by the Bench for verification. In the present case, it is an admitted fact that the Cenvat credit has already been availed and utilized as well. Hence, the said case law is not applicable to the facts of the present case. 21. As far as the penalty is concerned, in a case like this where it seems to be a mistake that was bonafide, probably because they were availing concessional rate of duty under Notification No.9/03-CE in previous year, the penalty would not be justified. Hence, penalty is set aside. 22. In view of foregoing, d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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