TMI Blog2002 (11) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Rules, 1944; that intravenous fluids was exempted from payment of duty under Notification No. 6/2000-C.E., dated 1-3-2000 as amended by Notification No. 36/2000-C.E., dated 4-5-2000; that the Deputy Commissioner, under Order-in-Original No. 35/2001, dated 29-5-2001 confirmed the demand of an amount of Rs. 38,22,164/- and imposed a penalty of Rs. 3 lakh holding that as per provisions of Rule 57AB of the Central Excise Rules, Cenvat credit is not available in respect of inputs which are used in or in relation to the manufacture of exemption goods and I.V. fluids is exempted with effect from 4-5-2000; that the Commissioner (Appeals) also under the impugned Order rejected their Appeal holding that Rule 57AD provides that Cenvat credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilized, has to be paid for." 3.2 He also relied upon the decision in the case of CCE v. Premier Tyres Ltd. 2001 (130) E.L.T. 417 (Ker.) wherein the Kerala High Court has held that there is no provision in the Rules to provide for reversal of credit except where it has been illegally or irregularly taken. He finally mentioned that similar views have been expressed by the Larger Bench of the Tribunal in CCE Rajkot v. Ashok Iron and Steel Fabricators, 2002 (140) E.L.T. 277 (T). He also contended that the demand is hit by time limit as the credit was availed as and when the inputs were brought to the factory and as such credit was availed upto 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For example a personal ledger account is commenced with a credit entry represented by a cash deposit in the treasury as required under Rule 9. When the first deposit is made in the treasury there is no payment of any excise duty. The deposit and the corresponding credit in the PLA account is only a provision for making payments of excise duty on the goods that are manufactured and are to be removed. Therefore, when a person makes the cash deposit in the treasury he does not actually pay excise duty he only makes a provision for the payment thereof and the actual excise duty stands paid only when it becomes payable in accordance with the Act and the Rules. Rule 57A clearly shows that Modvat credit is available for utilizing the credit so al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs which were lying unutilized. It is also not in dispute that these inputs are being used in the manufacture of I.V. fluids which are wholly exempted from payment of duty. The Cenvat Credit Scheme is a scheme to remove the cascading effect of the Central Excise duty as the same is levied at each stage of manufacture. The credit is available only and only if the final product suffers the Excise Duty. If no excise duty is payable in respect of any final product, the question of availing the Cenvat credit does not arise as there is no duty of excise at more than one level. A harmonious reading of Rules dealing with Cenvat Scheme and particularly Rule 57AC and Rule 57AD of the Central Excise Rules, 1944 makes it very evident that Cenvat c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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