TMI Blog2023 (4) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... rsed however, as regard the balance cenvat credit after such reversal shall lapse only in a case where the exemption notification is absolute. In the present case, notification no. 30/2004-CE is not a absolute notification - Since the above condition in such case in terms of clause (ii) of Rule 11(3) of Cenvat Credit Rules, 2004, the provision of lapsing of balance cenvat credit was not applicable in the present case. The issue is no longer res-integra accordingly, the impugned order being not sustainable in law - Appeal allowed. - Excise Appeal No.10726-10727 of 2013 - Final Order No. A/ 10938-10939 /2023 - Dated:- 20-4-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri Suyog Bhave, Advocate for the Appellant Shri. Tara Prakash, Deputy Commissioner (AR) for the Respondent ORDER The brief facts of the case are that the appellant are engaged in the manufacture of polyster texturized yarn, polyster filament yarn, poly yarn waste, POY Yarn waste falling under chapter no. 54 and 55 of the Central Excise Tariff Act, 1985. The appellant have opted for the notification no. 29/2004-CE dated 09.07.2004 and notification no. 30-2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finding of the impugned order. 04. We have carefully considered the submissions made by both the sides and perused the records. The lower authorities have denied the carrying forward of balance credit on the ground that the same shall stand lapsed as the appellant have opted for full exemption under notification no. 30/2004-CE. We find that the provision for reversal of credit and lapse of balance credit is provided under Rule 11(3) of Cenvat Credit Rules, 2004 which reads as under:- RULE 11. Transitional provision. (1) .. (2) . [(3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or (ii) the said final product has been exempted absolutely under section 5A of the Act, and after deducting the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... psing of credit is provided in Rule 11(3). (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the Cenvat credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under Section 5A of the Act; or (ii) the said final product has been exempted absolutely under Section 5A of the Act, and after deducting the said amount from the balance of Cenvat credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported. 7 . On the plain reading of the above Rule 11(3)(i) (ii), it is clear that as per sub-clause (2), the credit shall be lapsed only if the exemption under the No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the present case is squarely covered under the said decision. Actually Rule 11 sub-rule (1) of CCR is applicable to him. It is impressed upon that decision under challenge has wrongly relied upon Rule 11 sub-rule (2) of CCR while denying utilization of the unutilized credit with the appellant. Order is accordingly prayed to be set aside and appeal is prayed to be allowed. 4. Ld. DR while justifying the impugned order has impressed upon findings in para 21.2 thereof. It is impressed upon that the adjudicating authority has clearly explained about the applicability of Rule 11(2) in the present case. Appeal is accordingly prayed to be rejected. 5. After hearing both the parties, we are of the opinion that in the present case the appellant has opted for exemption as per the Notification No. 30/2004-C.E. where the exemption is conditional. As per Rule 11(3)(ii) CCR, Cenvat Credit balance will lapse only if the product is exempted absolutely under Section 5A of Central Excise Act. But since the Notification No. 30/2004-C.E., dated 9-7-2004 is a conditional notification, hence only Rule 11(3)(i) of CCR would apply which does not mandate any such lapsing. 6. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e those two sub-rules are separated not by just a particle or but also by a semicolon (;), thus creating an additional wall for conveying mutual exclusivity between the two sub rules. There is also no basis for suggesting that the use of or between these sub-rules conveys the meaning or both . For example, to be able to impose both a fine and a penalty, one would need to add or both to the end of the phrase. That surely is not the case here. 5.3 Viewed in this context, it is but obvious that the legislature intended the said sub-rules 3(i) and 3(ii) to be two distinct and separate alternatives, with distinctively different qualifying factors and conditionalities. 5.4 In sub-rule 3(i), the assessee has an option to avail of a particular notification or otherwise; when such assessee takes such option, he will be required to pay an amount equivalent to Cenvat credit, if any, 6. In the event, the findings and decision of the lower appellate authority to the contrary in the impugned order is not on sound legal footing. The impugned order then cannot sustain and will require to be set aside, which we hereby do. Appeal is allowed with consequential be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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