9911796707
TMI Blog2023 (7) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 30/2004-CE though reversed the cenvat credit attributed to input, input in process and input contained in the finished goods. However, after such reversal there was a balance of cenvat credit remained unutilized to the tune of Rs. 1,02,08,846/- which the appellant have kept on carrying forward the same every month. Out of the said amount the appellant utilized the amount of Rs. 4,42,539/- for payment of excise duty on removal of input namely POY as well as duty on paper tubes got manufactured on job work. The case of the department is that while availing the exemption Notification No. 30/2004- CE dated 09.07.2004, the appellant was not entitled to utilize the cenvat credit lying unutilized after reversal. Therefore, the amount utilized is required to be recovered. The show cause notice has been adjudicated by the Adjudicating Authority whereby the demand under Rule 14 was confirmed along with interest and penalty. Being aggrieved by the Order-In-Original the appellant filed an appeal before the Commissioner (Appeals). The Learned Commissioner (Appeals) concurring with the view taken by the Adjudicating Authority upheld the Order-In- Original and rejected the appeal of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 4.2 As per the clause (i) of Section 11 (3), assessee who opts for exemption is required to reverse the credit on input, input in process and input contained in the finished goods. As per the clause (ii) of Section 11 (3) if the assessee avail an absolute exemption notification in that case the remaining unutilized amount after reversal in terms of clause (i) shall stand lapse. As per the above provision, only in a case where the exemption which is opted for, if it is absolute exemption, the remainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether provided in India or exported." From the plain reading of the above rule 11(3) (i) (ii) it is clear that in terms of Clause (ii) of Rule 11(3) the balance credit shall lapse only if the assessee availed an exemption which is absolutely and exempted which is other than absolute covered under clause (i) of Rule 11(3). In case of clause (i) of Rule 11(3) no similar condition of lapsing of balance cenvat credit is provided. In the present case undisputedly the appellant have availed the benefit of Notification No 30/2004-CE which is a conditional one and the said condition prescribed is provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs has been taken under the provision of the Cenvat Credit Rules, 2002. 4.1 Since the Notification No. 30/2004-CE dated 09.04.2007 contains the above condition the notification is not absolutely therefore, the situation of the appellant is covered under Rule 11(3)(i) according to which the appellant is required to pay an amount equivalent to Cenvat Credit, if any taken by him in respect of inputs received for used in the manufacture of said final product and is lying in st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-section (1A) which makes clear distinction that in case of exemption granted absolutely the manufacturer of excisable goods shall not have any option except to pay the duty. The only option is to avail the exemption and no duty shall be paid. Therefore there is a clear distinction between an absolute exemption and conditional exemption. Therefore, the contention of the adjudicating authority that since the exemption notification was issued under section 5A the appellant is otherwise required to pay balance credit is of no substance and has no basis. 4.2 We find that this 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 relevant judgments are reproduced below:- CCE Vs. Orient Syntex- 2020 (40) GSTL 56 (T) "5.We find that there is no dispute on the fact that the respondent has opted for exemption Notification No. 30/2004-C.E., which carries the following conditions :- "Provided that nothing contained in this No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case all the conditions enumerated under sub-rule 3(i) has been followed by the Appellant and he is not required to reverse the entire credit lying in balance on the date of opting Notification No. 30/2004-C.E., dated 9-7-2004. Therefore, the balance credit is not liable to be reversed. For the same reason the credit utilised by him for clearance of finished goods or capital goods. We also find that on similar issues in the case of Wearit Global Ltd.- 2018 (8) TMI 1094- CESTAT, Janson Textile Processors- 2018 (7) TMI 850-CESTAT-Chennai and Sitaram India Ltd.- 2018 (10) TMI 11-CESTAT-New Delhi, the credit stands allowed to the manufacturer. 7. We, therefore, allow the appeals filed by both the Appellants with consequential reliefs, if any. Revenue's appeal being involved the amount less than Rs. 20 Lacs is dismissed on the ground of Government's litigation policy instruction F.No. 390/Misc/116/2017-JC, dated 11-7-2018." 7.2 In the case of Kanchan India Ltd.(supra), the Co-ordinate Bench of CESTAT, Delhi has taken the following view :- 6. After going through the impugned order and appeal papers, we are of the considered [view] that similar view has been taken by the various c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 vs. UOI, AIR 1961 SC 935; Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in the case of Supertex Industries Ltd. (supra) relied upon by the Learned Authorized Representative, the same is not directly applicable in the facts and circumstances of the present case and the same is distinguished. The impugned order is upheld and the Revenue's appeal is dismissed" Jansons Textile Processors v. Commissioner -2018 (7) TMI 850- (T) "5.1 The core issue that comes up for decision is whether the transitional provisions contained in sub-rule (3) of Rule 11 will be applicable to both sub-rule 3 (i) and 3 (ii). For better understanding, the relevant provisions relating to manufacturers are reproduced under : "RULE:-11. Tansitional provision .... .... ..... (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess .. or is contained in the final product lying in stock. There is no other requirement that the assessee falling within the scope of sub-rule 3 (i) will be required further to do. On the other hand, sub-rule (3) (ii) ibid willcover the situation where the said final product has been exempted 'absolutely' under Section 5A ibid. 5.5 Sub-rule (3) (i) ibid will apply when the assessee opts for an exemption from the whole of duty of excise leviable under a notification issued under Section 5A of the Central Excise Act, 1944. Sub-rule (3) (ii) ibid will be attracted only to those assessees who are confronted with absolute exemption in respect of final product/s manufactured by them, in which case the entire balance of cenvat credit lying in his account shall lapse and the same shall not be allowed to be utilized for payment of duty for home consumption or for export. 5.6 Hence, in sub rule 3 (i) ibid, the assessee has to 'opt'for the exemption whereas in sub-rule 3 (ii) ibid, there is no such option available to the assessee and the absolute exemption that may have been brought forth under Section 5A ibid would apply unilaterally to the related final product manufactured by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the settled position of law as above, I find no infirmity in the impugned order passed by the Commissioner (Appeals). The same is sustained and the appeals filed by Revenue are rejected." Wearit Global Ltd Vs CCE-2018(8) TMI 1094 CESTAT NEW DELHI 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-CE 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-CE dated 09.07.2004 is a conditional notification, hence only Rule 11 (3)(i) of CCR would apply which does not mandate any such lapsing. 6. We draw our support from the decision of CESTAT- Chennai in the case of Janson Textile Processors Vs. Commissioner of Central Excise & ST Salem wherein it was held as follows:- "5.1 The core issue that comes up for decision is whether the transitional provisions contained in sub-rule (3) of Rule 11 will be applicable to both sub-rules 3 (i) and 3 (ii). For better understanding, the relevant provisions relating to manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 benefits, if any, as per law." 7. Following these 2 decisions and indulging the facts at length, we are of the considered opinion that the ratio laid down in the judgments are squarely applicable in this case and therefore, we allow the appeal." From the above it can be seen that on the absolute identical issue involving the exemption notification 30/2004-CE the tribunal in various judgments held that balance credit shall not lapse in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
