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2016 (9) TMI 1389 - AT - Central ExciseCENVAT credit - NCCD - whether Cenvat credit of NCCD paid which was subsequently refunded through specific notification will over-ride the provisions of Rule 3? - whether the provisions of Rule 12 will interfere with the admissibility of Cenvat, provided through Rule 3 of CCR, 2004? Held that - Rule 12 provides that Cenvat credit of duty paid on inputs, which is subsequently refunded through said Notification No. 32/99-C.E., is admissible as if no such refund had been granted to the manufacturer of inputs. The said Rule does not prohibit from any such similarly worded notification having similar provision in respect of some other component of input credit disentitled for such credit - Rule 3 of CCR, 2004 also has no such provision that Cenvat credit of NCCD paid if subsequently refunded through specific notification, is not entitled for availment. Appeal allowed - decided in favor of appellant.
Issues:
Cenvat credit admissibility of NCCD paid and subsequently refunded through specific notification under Rule 3 of Cenvat Credit Rules, 2004 and Rule 12 interference with the admissibility of Cenvat. Analysis: The case involved two appeals against Order-in-Appeal Nos. 107 to 109-CE/NOIDA/2009 passed by the Commissioner (Appeals), Customs & Central Excise, Noida. The appellants, a manufacturer of branded Pan Masala, received unbranded Pan Masala from their unit in Guwahati, attracting various duties. The dispute arose regarding the admissibility of Cenvat credit of NCCD paid on unbranded Pan Masala. The Revenue contended that since Rule 12 of Cenvat Credit Rules did not mention Notification No. 27/2001, the credit was not admissible. A show cause notice was issued, disallowing the credit, imposing penalties, and directing payment of interest. The Original Authority upheld the disallowance and penalties. The Commissioner (Appeals) modified the order, reducing the personal penalty on one individual. The appellants appealed to the Tribunal, arguing that Rule 3 allows credit of duty paid on inputs, and non-mention of the notification in Rule 12 does not disentitle them from the credit. The Tribunal considered whether the Cenvat credit of NCCD paid and subsequently refunded through a specific notification would override Rule 3 and if Rule 12 interfered with the admissibility of Cenvat credit. It was noted that Rule 12 allows credit of duty paid on inputs refunded through a specific notification, without prohibiting similar provisions for other components. Rule 3 also does not restrict the availment of Cenvat credit if duty paid on inputs is subsequently refunded through a notification. The Tribunal found that the appellants had availed Cenvat credit of NCCD paid, satisfying Rule 3 requirements, and no rule was cited in the show cause notice prohibiting the credit. Consequently, the appeals were allowed with relief to the appellants as per law. This judgment clarifies the interpretation of Cenvat credit rules concerning NCCD paid and subsequently refunded through a specific notification, emphasizing the admissibility of credit under Rule 3 despite non-mention in Rule 12. The Tribunal's decision highlights the importance of statutory provisions and the absence of prohibitions in rules for claiming credits, ensuring a fair application of tax laws in such cases.
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