2018 (1) TMI 1686 - AT - Central Excise

Eligibility for simultaneous benefit under N/N. 30/2004 and N/N. 29/2004 (now 7/2012) - manufacturer and exporter of the cotton fabrics and cotton yarn - sold in the domestic market without payment of excise duty - period of dispute is October, 2014 to September, 2016 - HELD THAT - Notification No. 29/2004 providing the concessional rate of duty and there is no condition prescribed in Notification No. 30/2004. The goods were fully exempted provided that no credit was taken on the input. The Notification No. 30/2004 is mainly applicable to the domestic sale. On the other hand, Notification No. 29/2004 is mainly related to the export. From the Board s Circular No. 795/28/2004-CX., dated 28-6-2004, it is clarified that the simultaneous benefit under the Notification Nos. 29 30/2004 can be availed provided the manufacturer is maintaining the separate books of account for goods availing for each notification. Further, the Circular No. 845/03/2007-CX. dated 10-2-2007 has clarified that in order to facilitate simultaneous availment of the two notifications, such manufacturers may be advised not to take credit initially and can take only proportionate input credit on input used in the manufacture of finished goods cleared by him on payment of duty. It is clear that the appellant can avail the benefit of both the notifications simultaneously provided the condition laid down in each notification is satisfied. Matter remanded to the original authority to see whether the assessee has satisfied the condition of each notification if so then simultaneous benefit may be allowed to the appellant but by providing an opportunity to the appellant - appeal is allowed by way of remand.

Summary

Issues:
Interpretation of Notification No. 30/2004 and Notification No. 29/2004 for excise duty exemption eligibility.

Analysis:
The appeal was filed against Order-in-Original No. 7/2017-18, covering the period from October 2014 to September 2016. The appellant, a manufacturer and exporter of cotton fabrics and yarn, sold goods in the domestic market without paying excise duty under Notification No. 30/2004 dated 9-7-2004. Additionally, the appellant benefited from Notification No. 7/2012, which replaced Notification No. 24/2004. The dispute arose as the department contended that the appellant could not simultaneously benefit from both Notification No. 30/2004 and Notification No. 29/2004 (now 7/2012).

During the hearing, both counsels presented their arguments, and after reviewing the available material, it was observed that Notification No. 29/2004 provided a concessional duty rate without any specific conditions, while Notification No. 30/2004 granted full exemption on the condition of not taking input credit. The former was primarily for exports, while the latter was for domestic sales. Referring to Circulars No. 795/28/2004-CX. and No. 845/03/2007-CX., it was clarified that simultaneous benefits under both notifications were permissible if separate accounts were maintained for goods under each notification and input credit was taken proportionately.

The Tribunal concluded that the appellant could avail benefits under both notifications concurrently if the conditions of each notification were met. Therefore, the matter was remanded to the original authority to verify compliance with the conditions of both notifications. The appellant was granted the opportunity to provide additional evidence if necessary, following legal procedures. As a result, the appeal was allowed for remand, emphasizing the need for compliance with the conditions of the notifications for simultaneous benefits.