2022 (6) TMI 2 - AT - Central Excise

Benefit of concessional rate of duty - self-assessment under Rule 6 of Central Excise Rules, 2002 - Nil' duty under Sr. No. 90 of Notification No. 4/2006-CE dated 01-03-2006 as amended - whether the entry at Sl No 90 of the exemption Notification prescribing nil rate of duty is absolute exemption from the payment of duty, appellant were barred from payment of duty as per Sl No 93 of the same notification? - HELD THAT - The very same entries of the said notifications were considered by the tribunal in case of BALKRISHNA PAPER MILLS LTD, LAXMI BOARD AND PAPER MILLS LTD, COMMISSIONER OF CENTRAL EXCISE, THANE-I VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE I AND LAXMI BOARD AND PAPER MILLS LTD 2015 (11) TMI 210 - CESTAT MUMBAI , where it was held that the appellant-assessees cannot be forced to pay duty as per serial No. 90 of Notification 4/2006 and they have option to pay the duty under other numbers, viz. 91 and 93. Since issue is no longer res- integra, there are no merits in the impugned order - appeal allowed.

Issues Involved:
1. Confirmation of assessment under Rule 6 of Central Excise Rules, 2002.
2. Recovery of inadmissible Cenvat Credit.
3. Disallowance of inadmissible Cenvat Credit and its recovery.
4. Recovery of amounts collected as excise duty from customers.
5. Imposition of penalty under Section 11 AC of the Central Excise Act, 1944.

Issue-wise Detailed Analysis:

1. Confirmation of Assessment under Rule 6 of Central Excise Rules, 2002:
The Commissioner confirmed the assessment under Rule 6 of Central Excise Rules, 2002, for the goods cleared by the appellant from 01-03-2008 to 31-03-2008 and subsequent financial years at Nil rate of duty under Sr. No. 90 of Notification No. 4/2008-CE, dated 01-03-2008, for the first clearances not exceeding 3500 Metric Tonnes.

2. Recovery of Inadmissible Cenvat Credit:
The Commissioner ordered the recovery of inadmissible Cenvat Credit totaling Rs. 6,71,363/- under Rule 14 of Cenvat Credit Rules, 2004, as detailed in Annexure-A to the Show Cause Notice.

3. Disallowance of Inadmissible Cenvat Credit and Its Recovery:
The Commissioner disallowed inadmissible Cenvat Credit totaling Rs. 78,89,970/- availed by the appellant during 2008-09, 2009-10, and 2010-11, as detailed in Annexure-B to the Show Cause Notice, and ordered its recovery under Rule 14 of Cenvat Credit Rules, 2004.

4. Recovery of Amounts Collected as Excise Duty from Customers:
The Commissioner ordered the recovery of Rs. 75,22,325/- collected on invoices from customers during 2008-09, 2009-10, and 2010-11, under the guise of excise duty, to be deposited to the credit of the Central Government under Section 11-D of Central Excise Act, 1944.

5. Imposition of Penalty under Section 11 AC of the Central Excise Act, 1944:
A penalty of Rs. 85,61,309/- was imposed under the provisions of Section 11 AC of the Central Excise Act, 1944.

Tribunal's Analysis:
The Tribunal reviewed the structure of Central Excise duty on paper and paperboard as prescribed by Notification No. 4/2006-CE and its amendments. It examined whether the appellant was barred from paying duty under Sr. No. 93 of the notification when Sr. No. 90 prescribed a Nil rate of duty.

The Tribunal referred to the case of Balkrishna Paper Mills Ltd, where it was held that the appellant could not be forced to pay duty under Sr. No. 90 if conditions were attached to the exemption. It was concluded that the exemption under Sr. No. 90 was not absolute due to the conditions imposed, and thus, the appellant had the option to pay duty under other serial numbers, such as 91 and 93.

The Tribunal also referred to the case of Modi Xerox Ltd, where it was held that if goods are covered by two exemption notifications, the assessee can choose the one that provides greater relief, provided there is no specific or implied bar in the other notification.

Conclusion:
The Tribunal found that the issue was squarely covered by the decisions in the referred cases and held that the appellant could not be forced to avail the exemption under Sr. No. 90. The appeal was allowed, and the impugned order was set aside.

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