2012 (5) TMI 516 - AT - Central Excise

Availment of CENVAT Credit - Simultaneous availment of benefit of exemption under Notification No.29/2004-CE in respect of DTA clearances and in respect of clearances made on export - Held that - Tribunal in the Stay Order in the case of Shrijee Lifestyle Pvt. Ltd. 2011 (8) TMI 981 - CESTAT MUMBAI considered the simultaneous availment of benefit of Notification No.29/2004 in respect of domestic clearances and benefit of Notification No.59/2008 in respect of clearances made for exports and took a prima facie view that such simultaneous availment of two notifications was permissible - Stay granted.

Summary

Issues:

1. Availment of exemption under Notification No.29/2004-CE for DTA clearances and payment of duty @ 4% for clearances made on export.
2. Allegation of not being eligible for availing CENVAT credit on capital goods.
3. Confirmation of demand of duty along with interest by Commissioner (Appeals).
4. Interpretation of Board's Circular No.937/27/2010-CX regarding the simultaneous availment of notifications.
5. Tribunal's view on the permissibility of simultaneous availment of two notifications.

Analysis:

1. The appellant, a manufacturer of 100% cotton knitted processed fabrics, availed the benefit of exemption under Notification No.29/2004-CE for DTA clearances and paid duty @ 4% for clearances made on export. The Department issued a show-cause notice alleging that duty was not required for goods cleared for export, leading to ineligibility for CENVAT credit on capital goods.

2. The original authority dropped the proceedings, but on appeal, the Commissioner (Appeals) confirmed the demand of duty along with interest. The appellant estimated the duty demand to be Rs.20,47,358/- based on the show-cause notice, with no penalty imposed.

3. The appellant argued that they were not prevented from availing two notifications simultaneously, citing a Tribunal's Stay Order in another case. The Tribunal in that case considered the simultaneous availment of two notifications permissible, allowing the appellant to legally and properly avail the credit.

4. The Department, however, referred to Board's Circular No.937/27/2010-CX, stating that the appellant had no justification to avail Notification No.59/2008 for clearances made for export when the goods were unconditionally exempted under Notification No.29/2004.

5. After considering both sides' submissions and reviewing the records, the Tribunal agreed with the appellant's argument based on the precedent set in the Stay Order case. Consequently, the Tribunal waived the predeposit of dues as per the impugned order and stayed the recovery until the appeal's disposal, allowing the appellant relief pending further proceedings.