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2019 (6) TMI 192

of the Revenue that since the appellant cleared these products without payment of duty, claiming exemption under notification No. 82/84-CE, they have to pay an amount as per Rule 6(6) of CCR 2004 - HELD THAT:- In the present system, the Central Excise duty is leviable on all excisable goods which are manufactured or produced at the rates set out in the schedule to Section in Central Excise Tariff Act 1985 read with any exemption notification. The exemption notifications provide for either full exemption or partial exemption. Further, they can provide for either conditional exemption or unconditional exemption. If the exemption notification is an unconditional one, it applies to all persons and all clearances. If it is a conditional one, it applies to such persons and clearances as may meet the conditions. A person who is entitled to the exemption may chose not to fulfil the conditions and not to claim the exemption notification also. Further, it is also possible that the same person may clear the same goods, some claiming a conditional exemption and others without conditional exemption and paying duty. In the present case, the condition of the exemption notification 82/84-CE as ame .....

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In fact, the same product is being sold by them to several customers on payment of excise duty. In respect of the goods supplied to Hindustan Shipyard Limited, they avail the benefit of notification No. 82/84-CE, dated 31.03.1984 after following Chapter X procedure. It is their case that goods cleared under Chapter X procedure are neither chargeable to nil rate of duty nor are the goods fully exempted from payment of duty but are goods on which the duty is remitted. Therefore, in respect of such clearances, no reversal of CENVAT Credit under Rule 6 or payment of an amount under this rule is necessary. Ld. Counsel would submit that on an identical matter in their own case for earlier periods, this Bench vide following final orders has held in their favour: (i) Final Order No. A/30589-30590/2018, dated 21.05.2018 in Appeals No. E/30361 & 30363/2018. (ii) Final Order No. A/30405/2018, dated 08.02.2018 in appeal No. E/31202/2017. (iii) Final Order No. A/31276/2017, dated 17.08.2017 in Appeal No. E/21732/2015. (iv) Final Order No. A/31455-31460/2017, dated 07.09.2017 in Appeals No. E/291/2012, E/27926/2010, E/1047/2009, E/2092/2012 and E/2093/2012. 5. Ld. Counsel would draw the att .....

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castings. The aluminium ingots were inputs for the manufacture of castings. The castings were cleared following the Chapter X procedure referred above. The argument that the duty was remitted and not exempted has been rejected by holding that the petitioners rightly understood the later part of Rule 57C, namely, the castings are chargeable to nil rate of duty. In the present case, the petitioners state that there is a substantive right conferred by Rule 57A. What they have referred to is Rule 192. In their argument, they contended that Rule 57C will have no application. It is their case that the duty was remitted and not exempted. The petitioners also tried to explain the concept of charge at nil rate of duty. The argument essentially was that grant of remittable duty cannot be either exemption or duty being chargeable at nil rate. They explain the procedure by pointing out as to how the availment is taken. Even in this petition, they argued on the footing that they are manufacturers of castings. The castings manufactured by Petitioner No. 1 are in turn used in automobile industry. The inputs required to manufacture the said castings are aluminium ingots. The petitioners avail the .....

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se it. It is for that the show cause notices were issued and the explanation was sought. It is in that process that the petitioners relied upon all the decisions referred above. Once they had no application to the facts and circumstances of the petitioners case, then, we do not think that the concurrent findings in the orders impugned before us to be perverse or vitiated by error of law apparent on the face of the record. In any event, the arguments that are now canvassed before us were all considered by the appellate authority. We do not think that the impugned order suffers from any serious legal infirmity requiring interference in writ jurisdiction. 23. As a result of the above discussion, this writ petition fails. Rule is discharged. However, in the facts and circumstances of the case, there would be no order as to costs. (2) Micro Melt Pvt. Ltd. vs. CCE [2014(300)ELT 232 (Guj.), paras 15 & 16 of which read as follows: 15. Insofar as exemption Notification No. 6 of 2000 is concerned, goods used in the manufacture of power driven pumps, primarily designed for handling water are exempt. It was on this Notification, M/s. Shakti Pumps Ltd. was granted exemption by the excise au .....

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no longer exist. For the period relevant in this appeal, the rules in question were Central Excise (Removable of Goods at Concessional Rate of Duty for Manufacture of Excisable and other Goods) Rules 2001. These rules did not provide for remission of duty but only prescribed for a procedure to be followed by a manufacturer who intends to avail the benefit of the notification issued under Sub Section 1 of Section 5A of Central Excise Act, 1944 granting exemption of duty to excisable goods when used for purposes specified in the notification. In other words, the provision for remission of duty no longer exists after 2001. Since the new rules only deal with granting exemption of duty and the procedure to be followed to avail the exemption, there is no question of remission under the present system. The notification in question is Notification No. 82/84-CE, dated 31.03.1984 as amended by Notification No. 20/2006 which reads as follows: GENERAL EXEMPTION No. 46 Exemption to all capital goods, components and Raw materials cleared for repair of goods falling under Heading 89.01, 89.02, 89.04 and 89.05 (excluding float or submersible drilling or production platforms) and 89.06. [Notfn. No. .....

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s paid and goods on which exemption is claimed, the provisions of Rule 6 of CCR 2004 would apply. He also draws the attention of the Bench to the fact that the exemption notification nowhere specifies about remission or following the procedure under Chapter X. Therefore, the order of the Tribunal in the case of S.R.F. Limited (supra) as upheld by Hon ble Apex Court which was in the context of Chapter X procedure and the remission therein does not apply because the rules have changed and the remission no longer exists. He, therefore, argues that regardless of the earlier decisions, there is a clear exemption notification and where the exemption notification exists, the question of remission under Chapter X does not arise, as has been held by Hon ble High Court of Gujarat in the case of Micro Melt Pvt. Ltd. (supra). 9. I have considered the arguments on both sides and perused the records. I find that several appeals in respect of same appellant for the earlier periods on the same issue, were allowed relying on the case of Dharamsi Morarji Chemical Co. Ltd. (supra) holding that the clearances under Chapter X procedure without payment of duty does not amount to goods being exempt from .....

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18) and export under bond (Rule 19) are based on the generally accepted principle that goods should be exported but not the taxes on them. (iv) Exemption from payment of duty by notifications issued under Section 5A of the Central Excise Act, 1944: This section empowers the Central Government to issue notifications exempting goods from payment of duties either fully or partially and whether unconditionally or subject to some conditions. When a notification is issued, the tariff rate for the goods must be read with the exemption notification and duty must be paid accordingly. Whether the tariff rate itself is NIL or the exemption notification exempts the goods from the whole of duty, no duty is payable. If the exemption notification is conditional, it applies to those who fulfil the conditions and not to others. Conditional notification can also grant full exemption or partial exemption. (v) Remission of duty under Chapter X of the erstwhile Central Excise Rules, 1944 : These rules provided for a procedure for remission of duty for goods used for special industrial purposes subject to following of the prescribed procedure (Rules 192 to 196BB). (c) Changes in the law: The Central Ex .....

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a secure store-room suitable for the storage of the goods, and if the applicant agrees to bear the cost of such establishment as the Commissioner may consider necessary for supervising operation in his premises for the purposes of this Chapter, the Commissioner may grant the application, and the applicant shall then enter into a bond in the proper Form with such surety or sufficient security, in such amount and under such conditions as the Commissioner approves. Where, for this purpose, it is necessary for the applicant to obtain an Excise registration certificate, he shall submit the requisite application along with the proof for payment of registration certificate fee and shall then be granted a registration certificate in the proper Form. The concession shall, unless renewed by the Commissioner, cease on the expiry of the registration Certificate: Provided that, in the event of death, insolvency or insufficiency of the surety or where the amount of the bond is inadequate, the Commissioner may, in his discretion, demand a fresh bond; and may, if the security furnished for a bond is not adequate, demand additional security. Sections 1 & 2 of the Central Excise (Removal of Goo .....

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E.L.T. 783 (T) (ii) India Poly Fibres Ltd. v. CCE, Allahabad - 1999 (111) E.L.T. 748 (T) (iii) Reliance Industries Ltd. v. CCE, Bombay - 1995 (78) E.L.T. 595 (T) (iv) J.K. Synthetics Ltd. v. CCE, Jaipur - 1996 (87) E.L.T. 389 (T) (v) Orissa Synthetics Ltd. v. CCE - 1995 (77) E.L.T. 350 (T). (f) Remission of duty under Chapter X procedure: In the case of Commissioner of Central Excise, Indore vs SRF Ltd. 2008 (223) E.L.T. 508 (Tri. - Del.) (decided on 7-11-2003) the same logic as was applied to exports under bond, was extended to the goods supplied claiming remission under Chapter X of Central Excise Rules, 1944 and it was held that MODVAT was available. Civil Appeal CA No. 195of 2005 filed by the Department was dismissed by the Hon ble Apex Court as reported in [Commissioner v. SRF Limited - 2010 (255) E.L.T. A13 (S.C.)] (g) In the case of Atlas Automotive components Pvt. Ltd. vs UOI (2017 (350) ELT 42(Bom), the Hon ble High Court rejected that argument that remission of duty for goods cleared under Chapter X procedure is not equivalent to exemption or payment at nil rate and hence MODVAT credit need not be reversed. In the case of Micro Melt Pvt. Ltd. (2014 (300) ELT 232 (Guj), th .....

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rtheless, all these categories fall under the category of exemption as is evident from the plain reading of Section 5A. The CENVAT Credit Rules, 2004 provide for credit of duty paid on inputs subject to the condition that the final products are not either chargeable to nil rate of duty or are fully exempted. The full exemption depends upon, in cases of conditional exemption notifications, whether the person is eligible for the exemption and chooses to fulfil those conditions or otherwise. For instance, a Small Scale Industry may be fully exempted up to some limit and thereafter will be liable to pay Excise Duty. As long as they are exempted from payment of duty (although the exemption is subject to the condition of value of clearances), they are not entitled to CENVAT Credit. The day they start paying duty, they will be entitled to the benefit of CENVAT Credit. It does not also matter what the conditions of exemption notification are. In the present case, the condition of the exemption notification 82/84-CE as amended is that the assessee has to get a certificate from the jurisdictional Asst. Commissioner or Dy. Commissioner and that they have to follow the procedure set out in the .....

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