TMI Blog2005 (4) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. Arora, learned SDR, and perused the records. The Appellants, a SSI unit, manufacture lay flat tubing, polymer bags and polythene sheets falling under Chapter 39 of the Schedule to the Central Excise Tariff Act. Notification No. 5/98-C.E., dated 2-6-1998 (Srl. No. 71) exempts lay flat tubing from payment of whole of the Excise duty unconditionally. The Appellants, instead of availing the benefit of the exemption Notification, paid duty at the tariff rate in respect of lay flat tubings and availed of MODVAT Credit of the duty paid on inputs used in or in relation to the manufacture of lay flat tubing. The Deputy Commissioner, under Order-in-Original dated 20-1-2000, disallowed the Modvat Credit amounting to Rs. 5,41,849/- and imposed a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot." 3. It has also been held by the Tribunal in Bansal Auto case that "there is nothing in the MODVAT Rules which says that if an exemption is available to the manufacturer by way of an exemption notification, then he is ousted from the purview of MODVAT Scheme." Reliance has also been placed on the decision in SAIL v. CCE, 2001 (129) E.L.T. 636 (T) and CCE v. VIP Industries, 1998 (103) E.L.T. 95 (T). 4. On the other hand Shri O.P. Arora, learned SDR, submitted that the lay flat tubings manufactured by the Appellants are exempted from whole of the duty unconditionally under Notification No. 5/98-C.E., dated 2-6-1998 (Srl. No. 71); that Rule 57C of the Central Excise Rules, 1944 clearly mentions that no credit of the duty shall be allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad along with the Act and when a Notification is issued in accordance with the powers conferred by the Statute, it has statutory force and validity and therefore, the exemption under Notification is as if it were contained in the Act itself. Reliance has also been placed on the decision in the case of Orient Weaving Mills (P) Ltd. v. U.O.I., 1978 (2) E.L.T. (J311) (S.C.) and Orient Paper Mills Ltd. v. Deputy Director of Inspection, Customs Central Excise, 1982 (10) E.L.T. 247 (Del.). 5. Finally the learned SDR referred to Article 265 of the Constitution of India which mentions that "No tax shall be levied or collected except by authority of law" and submitted that a legal levy of duty and collection thereof is as per law and not as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorised by the law. Section 3 of the Central Excise Act also mentions of levy and collection of duty of Excise as, and at the rates, set forth the Schedule to the Central Excise Tariff Act. Further Section 5A of the Act provides that if the Central Government is satisfied that it is necessary in the public interest so to do, may, by notification exempt excisable goods from the whole or any part of the duty of excise leviable thereon. Thus the duty of excise is to be levied and collected as per the rates set forth in the Schedule read with the Exemption Notification. Otherwise the levy and collection shall be without authority of law. The Supreme Court has held in Parle Exports (P) Ltd. as under : - "The Notification must be read as a wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elying upon the decision in Orient Weaving Mills, supra, has held "Therefore, if the exemption notification in the case of Paper Mills is read as part of the statute the rate of the levy gets reduced and the distinction between leviable and payable as put forward by the paper mills becomes meaningless." 7. In view of these pronouncements of the Supreme Court and the High Court and the provisions, contained in Article 265 of the Constitution and the Central Excise Act, we are of the view that the duty of excise has to be discharged after taking into consideration the exemption granted by a Notification. If the Notification contains certain condition, certainly an assessee cannot be compelled to fulfil those conditions. Once an assessee doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmoniously. It is not open to an assessee to go against the provisions of the law for the purpose of availing the Modvat credit. In other decisions relied upon by the Appellants we find that the decisions of the Supreme Court and the Delhi High Court to the effect that notification is to be treated as it is contained in the Act itself have not been considered. We, therefore, hold that the Appellants were not eligible to discharge the duty on lay flat tubings which were exempted from payment of duty unconditionally under the exemption notification and avail of Modvat credit. We, therefore, uphold the disallowance of Modvat credit to them. However, as the issue involved is one of interpretation and there were decisions to the contrary, no pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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