2018 (5) TMI 474 - AT - Central Excise

Whether the assessees are eligible to avail exemption as per Notification No. 4/2006 under Sl. No. 91 and clear the goods on concessional payment of duty or whether it is mandatory to avail nil rate of duty as provided under Sl. No. 90? Held that - The demand made in the appeals filed by M/s. Srivari Packaging Industries, M/s. Srivari Print Pack and M/s. Shri Ram Cartons cannot sustain for the reason that they have rightly availed credit of duty passed on by M/s. Kovai Maruthi Paper and Boards Pvt. Ltd. who have cleared goods on payment of concessional rate of duty under Sl. No. 91 of Notification No. 4/2006. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Whether the assessees are eligible to avail exemption under Notification No. 4/2006 and clear goods on concessional payment of duty or if it is mandatory to avail the nil rate of duty under a specific clause.

Detailed Analysis:
1. The appeals involved show cause notices issued to two companies alleging wrongful credit utilization on inputs for manufacturing exempted goods. The department contended that the appellants should have availed exemption subject to specific conditions but instead cleared goods at a concessional duty rate and availed credit on inputs. The original authority confirmed the demand, directed to credit the duty amount collected to Consumer Welfare Fund, and imposed penalties.

2. The appeals filed by the assessees challenged the demand confirmation, direction to credit to the Fund, and imposition of interest and penalties. The Department also filed appeals against the same orders, arguing against the direction to credit to the Consumer Welfare Fund.

3. Another set of appeals were filed by appellants issued show cause notices for allegedly wrong credit availment on goods cleared by another company. The appellants filed refund claims, which were initially sanctioned but later modified to reject the refund and transfer the amount to the Consumer Welfare Fund.

4. The main issue was whether the assessees could opt for exemption under a specific clause or were mandated to avail the nil rate of duty under another clause of Notification No. 4/2006.

5. The legal counsel for the appellants argued that they had the option to avail the concessional duty rate under a specific clause rather than the nil rate of duty as mandated by the department. The counsel relied on previous judgments to support their argument.

6. The Tribunal referred to a previous case and analyzed the conditions under different clauses of the notification. It concluded that the assessees had the option to pay duty under different clauses and could not be forced to pay duty under the nil rate clause.

7. Consequently, the Tribunal held that the demands made against the assessees could not be sustained and set them aside. The department's appeals were dismissed, and the orders related to the appeals were also set aside.

8. The assessees' appeals seeking permission to withdraw were granted, and those appeals were dismissed as withdrawn. The final order allowed the assessees' appeals, dismissed the department's appeals, and granted consequential relief to the assessees.

This detailed analysis covers the various issues involved in the legal judgment delivered by the Appellate Tribunal CESTAT Chennai.