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2018 (12) TMI 356 - AT - Central ExciseUtilization of Cenvat credit of basic excise duty for payment of National Calamity Contingent Duty (NCCD) - Held that - Rule 3 (1)(v) the Cenvat credit includes the NCCD leviable under Section 136 of Finance Act 2001. As per this provision credit of NCCD is a Cenvat credit. As regard utilization in terms of Rule 3(4)(a) the Cenvat credit is allowed to be utilized for payment of any duty of excise on any final product. Rule 3(7)(b) provides some restrictions according to which the cevnat credit in respect of NCCD can be utilized only for payment of NCCD that means Cenvat credit of NCCD is not allowed to be utilized for payment of basic excise duty. However similar restriction is not provided for utilization of basic excise duty for payment of NCCD. The Hon ble High Court in the case of CCE Dibrugarh vs. Prag Bosimi Synthetics Limited 2013 (11) TMI 487 - GAUHATI HIGH COURT after interpreting Rule 3(4) and Rule 3(7) came to the conclusion that the Cenvat credit can be utilized towards payment of NCCD in Cenvat credit. In view of the clear statutory provisions there is no bar in utilization of basic excise duty for payment of NCCD. Appeal dismissed - decided against Revenue
Issues Involved:
1. Whether the respondent is entitled to utilize Cenvat credit of basic excise duty for payment of National Calamity Contingent Duty (NCCD). Detailed Analysis: Issue 1: Utilization of Cenvat Credit for Payment of NCCD Arguments by Revenue: - The Revenue argued that as per Rule 3(4)(a) of the Cenvat Credit Rules, only duty of excise can be utilized for payment of NCCD. - NCCD is not considered a duty of excise but a surcharge; hence, basic excise duty cannot be used for its payment. Arguments by Respondent: - The respondent supported the order of the Commissioner (Appeals) and referred to Rule 3, which outlines the availment and utilization of credit. - It was argued that there is no restriction on utilizing excise duty for payment of NCCD, only a restriction on utilizing NCCD for payment of other duties. - The respondent cited several judgments to support their stance, including Prag Bosimi Synthetics Limited vs. CCE, CCE vs. Prag Bosimi Synthetics Limited, UOI vs. Kamakhya Cosmetics & Pharmaceutical Pvt. Limited, and others. Rule 3 Analysis: - Rule 3(1)(v) includes NCCD as part of the Cenvat credit. - Rule 3(4)(a) allows Cenvat credit to be utilized for payment of any duty of excise on any final product. - Rule 3(7)(b) restricts the utilization of NCCD credit only for payment of NCCD, but does not restrict the use of basic excise duty credit for payment of NCCD. Judicial Precedent: - The Hon’ble Gauhati High Court in CCE, Dibrugarh vs. Prag Bosimi Synthetics Limited interpreted Rule 3(4) and Rule 3(7) and concluded that Cenvat credit of basic excise duty can be utilized for payment of NCCD. - The High Court clarified that while Cenvat credit of NCCD can only be used for NCCD, there is no prohibition on using Cenvat credit of other duties, including basic excise duty, for payment of NCCD. Tribunal's Conclusion: - The Tribunal found no infirmity in the order of the Commissioner (Appeals). - It upheld the view that there is no bar in utilizing basic excise duty for payment of NCCD based on clear statutory provisions and judicial precedents. - The appeal by the Revenue was dismissed. Order: - The Tribunal upheld the order of the Commissioner (Appeals) and dismissed the Revenue's appeal, confirming that the respondent is entitled to utilize Cenvat credit of basic excise duty for payment of NCCD.
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