2012 (5) TMI 548 - AT - Central Excise

Deemed credit - Notification No. 29/96-C.E. (N.T.) - Held that - Admittedly the credit was availed in terms of Notification No. 29/96-C.E. (N.T.) which was rescinded vide Notification No. 24/2000-C.E. (N.T.), dated 1-4-2000. With the rescinding of the Notification, the credit availed in terms of earlier Notification also lapsed. The appellant was not covered under the subsequent Notification issued under Rule 57A of Central Excuse Rules, 2002 as they were working under compounded levy scheme. As such I hold that the appellant was not entitled to carry forward the balance credit of Rs. 29,352/-. Accordingly I confirm the same. However, in respect of penalty of Rs. 2,000/-, I find that this is not the case involving any mala fide - Decided in favour of assessee.

Summary

Issues: Dispute regarding deemed credit availed under Notification No. 29/96-C.E. (N.T.) after its rescinding and applicability of subsequent Notification under Rule 57A of Central Excise Rules, 2004 to appellants under compounded levy scheme.

In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the dispute revolved around the deemed credit of Rs. 49,352/- availed by the appellants in accordance with Notification No. 29/96-C.E. (N.T.), which was rescinded on 1-4-2000 via Notification No. 24/2000-C.E. (N.T.). The appellants, engaged in processed fabrics manufacturing, transitioned to a compounded levy scheme from 1-4-2000 to 28-2-2001. Upon exiting the scheme, they carried forward the aforementioned deemed credit. The Revenue contended that the credit availed under the rescinded Notification lapsed with its rescission, and the subsequent Notification under Rule 57A of Central Excise Rules, 2004 did not apply to the appellants due to their operation under the compounded levy scheme.

The Tribunal concurred with the Revenue's stance, emphasizing that the credit was indeed availed under the rescinded Notification No. 29/96-C.E. (N.T.). Consequently, upon the rescission of the Notification, the credit obtained under it also ceased to be valid. The Tribunal noted that the appellants were not covered by the subsequent Notification issued under Rule 57A of Central Excise Rules, 2004, as they were functioning under the compounded levy scheme. Consequently, the Tribunal held that the appellants were not entitled to carry forward the remaining credit of Rs. 29,352/-. However, regarding the penalty of Rs. 2,000/-, the Tribunal found no mala fide intentions but rather a bona fide interpretation of the law. Consequently, the Tribunal set aside the penalty imposed on the appellant, concluding the appeal on these terms. The judgment was pronounced in open court by Ms. Archana Wadhwa, J.