TMI Blog2023 (7) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption notification. In the present case since the Notification No. 30/2004-CE is undisputedly a conditional one therefore clause (ii) of the Rule 11 (3) is not applicable. Consequently the remaining amount of unutilized cenvat credit shall not lapse. In this case the appellant has utilized an amount of Rs. 4,42,539/- out of unutilized cenvat credit which is not barred under any of the provision. In the case of SYNFAB SALES AND INDUSTRIES LTD VERSUS C.C.E S.T. -SILVASA [ 2022 (1) TMI 259 - CESTAT AHMEDABAD] , this Tribunal dealing with the absolutely identical issue held that The issue has been considered by the tribunal time and again and after interpreting Rule 11(3) (i) and (ii) came to conclusion that in case of conditional notification the assessee is not required to lapse the remaining credit after reversal on input as such, input in process and input contained in finished goods. The issue is no longer res-integra. Accordingly, the impugned order is set aside - Appeal allowed. - Excise Appeal No. 13518 of 2013-DB - Final Order No. A/ 11593 /2023 - Dated:- 24-7-2023 - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1972(2) TMI 107 SC Ranchhodas Atmaram Vs. The Union of India - 1961 (2) TMI 72 SC M/s. Kanchan India Ltd Vs. CCE, Udaipur 2019 (1) TMI 310 CESTAT New Delhi CCE , Udaipur Vs. M/s. Sitaram India Limited - 2018 (10) TMI 11 CESTAT New Delhi Synfab Sales and Industries Ltd Vs. CCE ST SILVASA 2022 (1) TMI 259 CESTAT Ahmedabad M/s. Patodia Filaments Pvt Ltd , Shivkaran Choudhary VS. CCE ST VAPI- 2019 (4) TMI 435- Ahmedabad. M/s. Wearit Global Ltd Vs. CCE, Udaipur - 2018 (8) TMI 1094 Cestat New Delhi Jansons Textile Processors Vs. Commissioner of Central Excise ST Salem -2018 (7) TMI 850 CESTAT Ahmedabad M/s. Supertex Industries Ltd , Shri Balkrishna Sharma Vs. Commissioner , Central Excise Service Tax, Vapi 2015 (11) TMI 1337 CESTAT Ahmedabad. 2.1 He submits that since the exemption Notification No. 30/2004-CE is conditional one, the unutilized cenvat credit remitted after reversal as provided under Rule 11 (3) of the Cenvat Credit Rule, 2004, the same can be utilized as upheld in the above judgments. 3. Shri Rajesh K Agarwal, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption notification. In the present case since the Notification No. 30/2004-CE is undisputedly a conditional one therefore clause (ii) of the Rule 11 (3) is not applicable. Consequently the remaining amount of unutilized cenvat credit shall not lapse. In this case the appellant has utilized an amount of Rs. 4,42,539/- out of unutilized cenvat credit which is not barred under any of the provision. The same issue has been considered in various judgments of the Tribunal cited by the learned counsel. In the case of Synfab Sales Industries Ltd (Supra), this Tribunal dealing with the absolutely identical issue passed the following order:- 4. We have carefully considered the submissions made by both the sides and perused the records. We find that the limited issue to be decided by us is that when the appellant has availed the exemption Notification No. 30/2004-CE dated 09.07.2004 which prescribed the nil rate of duty but bearing condition that no Cenvat credit should be availed whether Cenvat credit lying in balance after reversal on inputs, WIP and inputs contained finished goods, shall lapse in terms of Rule 11(3). For the ease of reference we reproduced Rule 11(3):- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant is covered by rule 11(3) (i) therefore, the remaining credit shall not lapse. One of the contention by the adjudicating authority is that even though the argument of the appellant that the Cenvat credit balance will lapse as per Rule 11(3) only, the product is exempted absolutely is accepted there is no dispute that Notification No. 30/2004-CE has been issued under section 5A of the Central Excise Act, 1944 and the appellants having opted for the same, cannot escape from the obligation relating reversal of balance Cenvat Credit. The relevant section5A is reproduced below:- [5A. Power to grant exemption from duty of excise.(1)If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable goods of any specified description from the whole or any part of the duty of excise leviable thereon: Provided that, unless specifically provided in such notification, no exemption therein shall apply to excisable goods which are produced or manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004-C.E. is not an absolute exemption. The provision for lapsing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I 850 (CESTAT), Chennai has submitted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubt, since 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 consequentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. 5.2 It is pertinent to note that the sub-rule 3 (i) and sub-rule 3 (ii) are separated by a semicolon ( ; ) followed by the disjunctive or . The use of semicolon ( ; ), the punctuation mark is to separate two closely related independent clauses. Or is a particle used to connect words, phrases or classes representing alternatives [ J. Jayalalitha Vs UOI - (1999) 5 SCC 138 ].Only if the phrasing of the legal provision is such that in actuality and is intended, should it be examined whether the alternatives separated by or are not mutually exclusive. The Courts may construe or as and , only if they find from the context that the wrong word must have been used. [Ranchhoddas Atmaram v. UOI, AIR 1961 SC 935; Firoj Farukee v. State of West Bengal, AIR 1972 SC 2141] . However, in respect of the sub-rule 3 (i) and sub-rule 3 (ii) ibid, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of payment of cenvat credit equivalent to credit taken by the assessee in respect of inputs lying in stock or in process in sub rule 3 (ii) ibid. In our view, this is because once the entire cenvat credit account is reduced to naught, there will be no cenvat credit that will be available whatsoever, under sub-rule 3 (ii) ibid, for the assessee to avail. 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 benefits, if any, as per law. CCE Vs Sitaram India Ltd- 2018(10) TMI 11- CESTAT NEW DELHI 6. The respondent who was availing the benefit of cenvat credit under Cenvat Credit Rules, 2004, opted for exemption granted by Notification No.30/2004 ibid, w.e.f. 01.04.2013. The dispute has arisen consequent to such a move on the part of the respondent. Rule 11 of Cenvat Credit Rules, 2004 outlines the transitional provisions which are required to be followed by an assessee opting from the route of payment of duty to that of availing exemption. The qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. .... .... ..... (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. 5.2 It is pertinent to note that the sub-rule 3 (i) and sub-rule 3 (ii) are separated by a semicolon ( ; ) followed by the disjunctive or . The use of semicolon ( ; ), the punctuation ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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