2014 (9) TMI 104 - AT - Central Excise

Denial of CENVAT Credit - Exemptions in Notification No.5/2006-CE dt. 01.03.2006 and 2/2008-CE dt. 01.03.2008 - exemption under Notification No.5/2006-CE is subject to the condition that no Cenvat Credit is taken by the appellant but Notification No.2/2008-CE has no such condition - Held that - It is the case of the revenue that once appellant was availing the benefit of Notification No.5/2006-CE then Cenvat Credit should not have been taken. Alternately, it can also be viewed that once appellant started taking Cenvat Credit then benefit of Notification No.5/2006-CE was not admissible. If the benefit of Notification No.5/2006-CE was not admissible then appellant was entitled to the alternative benefit of Notification No.2/2008-CE where no such condition existed. It is now a settled proposition of law that when there are two exemption notifications available for a product then it is upto the assessee to choose the exemption notification more beneficial to him. - Following decision of Mangalam Alloys Ltd. Vs. C.C.E., Ahmedabad 2010 (4) TMI 493 - CESTAT, AHMEDABAD - Decided in favour of assessee.

Summary

Issues:
- Appeal against OIA No. PJ/64/VDR-II/2013-14 confirming a demand of Rs. 18,94,618/- along with penalties.
- Applicability of Notification No.5/2006-CE and 2/2008-CE on ceramic glazed tiles.
- Entitlement to Cenvat Credit while availing exemption benefits.
- Judicial precedents supporting the right of the assessee to choose the more beneficial exemption notification.

Analysis:
The appellant filed an appeal against OIA No. PJ/64/VDR-II/2013-14, which confirmed a demand of Rs. 18,94,618/- along with penalties imposed by the adjudicating authority. The appellant contended that ceramic glazed tiles of Chapter 69 were eligible for exemptions under Notification No.5/2006-CE and 2/2008-CE. The key argument was that while Notification No.5/2006-CE required no Cenvat Credit to be taken, Notification No.2/2008-CE had no such condition. The appellant started availing Cenvat Credit once the effective rates of duty under both notifications became the same. The appellant cited various case laws to support the position that when two exemption notifications are applicable, it is the assessee's prerogative to choose the more beneficial one.

The revenue, represented by Shri K. Sivakumar, argued that the appellant was not entitled to Cenvat Credit while availing the benefit of Notification No.5/2006-CE. The revenue defended the stand taken by the adjudicating authority and the first appellate authority. After hearing both sides and examining the case records, the bench noted that the issue was narrow. The bench highlighted that the appellant could choose the more advantageous exemption notification when multiple notifications applied to a product. Citing the case of Mangalam Alloys Ltd. Vs. C.C.E., Ahmedabad, the bench emphasized that the assessee has the right to claim the more beneficial exemption when faced with multiple options. The bench referred to several judicial precedents to support the principle that the assessee is entitled to the benefit of the exemption notification that provides greater relief, even if one notification is more specific than the other.

In light of the settled legal position and the principle that the assessee can choose the more beneficial exemption notification, the appeal filed by the appellant was allowed. The operative part of the order was pronounced in court, granting relief to the appellant based on the established legal precedents and the right of the assessee to select the exemption that offers the most advantageous terms.