2012 (9) TMI 864 - AT - Central Excise

Restricted benefit of Notification No. 32/1999-C.E., dated 8-7-1999 - Revenue contends that for the purpose of computation of the eligible amount the credit availability has to be considered on a daily basis and the relevant date will be the date of clearance of the goods - Held that - two limits have been prescribed in the notification for the purpose of exemption. The upper limit is the value addition as prescribed in the notification and the lower limit is the amount of duty paid in cash. Since the duty payment is made on monthly basis and Cenvat credit is also utilized on monthly basis, there is no warrant in the notification to suggest that the computation of exemption should be made on a daily basis at all. Inasmuch as the notification prescribes the upper limit and lower limit, the appellant cannot be denied the benefit of lower limit prescribed in the notification - Decided in favour of assessee.

Summary

Issues: Duty exemption computation under Notification No. 32/1999-C.E. for excisable goods falling under Chapters 39 and 94 of the Central Excise Tariff Act, 1985.

Analysis:
1. Issue of Duty Exemption Computation: The appeal involved a dispute regarding the computation of duty exemption under Notification No. 32/1999-C.E. for excisable goods manufactured by M/s. the Supreme Industries Ltd. falling under Chapters 39 and 94 of the Central Excise Tariff Act, 1985. The notification provided for duty exemption based on value addition undertaken by units in specified areas, with specific limits for different goods. In this case, the appellant claimed a refund of Rs. 1,67,716/- under the notification, which exceeded the duty paid in cash of the same amount. However, the department restricted the claim to Rs. 1,17,216/-, citing the need to consider credit availability on a daily basis for computation. The appellant contended that duty payment and credit availability should be assessed on a monthly basis, as per the last day of the month of clearance.

2. Interpretation of Notification Limits: The learned Counsel for the appellant argued that the notification prescribed two limits for exemption - an upper limit based on value addition and a lower limit based on duty paid in cash. It was emphasized that since duty payments and Cenvat credit utilization occur monthly, the computation for exemption should also be monthly. The contention was that the appellant was entitled to the full amount of Rs. 1,67,716/-, representing the cash payment made for goods clearance in November 2010. The argument focused on the absence of any provision in the notification requiring daily computation for exemption eligibility.

3. Judicial Analysis and Decision: The Tribunal analyzed the provisions of the notification and agreed with the appellant's interpretation. It was noted that the notification clearly specified upper and lower limits for exemption without mandating daily computation. As duty payments and credit utilization were monthly activities, the Tribunal held that the exemption computation should align with this monthly timeline. Consequently, the appeal was allowed in favor of the appellant, granting the requested relief. The decision highlighted the importance of adhering to the notification's prescribed limits and the monthly nature of duty-related transactions in determining duty exemption eligibility.

In conclusion, the judgment resolved the issue of duty exemption computation under Notification No. 32/1999-C.E. by interpreting the notification's provisions in line with the appellant's arguments regarding monthly assessment of duty payments and credit availability. The decision underscored the significance of aligning exemption calculations with the practical aspects of duty-related financial activities, ultimately ruling in favor of the appellant based on the notification's clear limits and operational timelines.