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TMI Blog2008 (11) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... o take credit of duty paid in cash and submit a statement to the jurisdictional AC/DC containing details in the next month before 7th to the month under consideration and AC/DC shall determine the amount correctly refundable to the manufacturer and intimate the same to the manufacturer by 15th of the next month. In case, the credit taken by the manufacturer is in excess of the amount determined by the AC/DC, the manufacturer is required to reverse the credit within 5 days from the receipt of the said intimation. The self-credit taken in the PLA can be utilized for payment of duty in the subsequent months which would be treated as cash payment. 2. During months of May, 2005 , July, 2005 and September to December, 2005, the appellants had utilized Rs. 20,19,827/- available in the Cenvat credit account for payment of service tax on GTA services. However, the appellants themselves noticed that such utilization of Cenvat credit for payment of service tax is in violation of the condition of Notification No. 39/2001 and , deposited the entire tax on GTA amounting to Rs. 21,63,090/- towards service tax and Rs. 43,243/- towards education cess for the period from May, 2005 to January 2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nus was on the appellants to ensure that they take correct amount as credit having chosen option to self-credit vis-a-vis the grant of refund by the department. Therefore, we do not think there is a substantive compliance as argued by the learned Advocate. The next argument advanced is that once they made payment in cash on 4-4-06, the excess refund becomes revenue neutral and therefore, the demand is not sustainable. It was also argued that while interpreting the exemption notification, the intention behind the same should be considered and once they made the payment through PLA, the intention behind the notification was fulfilled and if they are denied the benefit of Notification, the very purpose of the Notification would be defeated. She also argued that the demand for the month of May 2005 and July, 2005 are barred under limitation as they are beyond the period of one year from the relevant date under clause 2A which required the AC/DC to determine the refundable amount and intimate before 15th of next month. The correctly refundable amount was intimated only 30-6-06 for May, 2005 and June, 2005. The notices issued on 23-8-06 are beyond the period of one year from the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x made by them in cash on 4-4-06, we do not think that such an interpretation is possible. The Notification envisages a system of monthly accountal of Cenvat credit utilization and calculation of eligible refund amount. It also contemplates procedure for recovery or payment of excess refund to the manufacturer in case of mistake or oversight by a specific date in the next month. The Notification also provides for limitation in case of erroneous refund. Such being the case, acceptance of the appellant s contention that by paying service tax in cash on 4-4-06, the omission made in May, 2005 to December, 2005 can be regularized cannot be accepted. Once it, was found that they had taken excess refund, the proper action to be taken was to repay the amount with interest. In such a case, there would have been no requirement to pay service tax in cash. The appellants have to pursue other legal remedies as regards the excess payment, if any, made towards service tax. 9. In view of the above discussions, the demand for the months of May, 2005 and July, 2005 amounting to Rs. 5,68,837/- is held non-sustainable. The appeal succeeds to the above extent only. (Pronounced in the open Court on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liar nature of this case, it is necessary to state the essential facts. The above Notification was issued by the Central Government to benefit the manufacturing units located in Kutch District of Gujarat. The appellant s unit is located in that district. The Notification granted a concession to such Units. Accordingly, the manufacturer not required to pay so much of the duty of excise, or the additional duty of excise, as the case may be, on goods other than the goods specified in the annexure to the Notification, as was equivalent to the amount of duty paid by him other than the amount of duty paid by utilisation of CENVAT credit under the CENVAT Credit Rules, 2001. Thus the manufacturers in Kutch District, who manufactured the goods (eligible for the benefit of the Notification) and cleared the same on payment of duty in cash, became entitled to refund of that duty. If the manufacturer paid duty partly in cash (from Personal Ledger Account) and partly by way of debit in CENVAT account, he became entitled to refund of the duty paid in cash. Such refund could be availed by way of taking credit in PLA. The Notification laid down alternative procedures for such refund. According to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a statement of the duty paid, other than by way of utilisation of CENVAT credit under the CENVAT Credit Rules, 2002, along with the refund amount which he has taken credit and the calculation particulars of such credit taken, to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, by the 7th day of the next month to the month under consideration; (e) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall determine the amount correctly refundable to, the manufacturer and intimate the same to the manufacturer by 15th day of the next month to the month under consideration. In case the credit taken by the manufacturer is in excess of the amount determined, the manufacturer shall, within five days from the receipt of the said intimation, reverse the said excess credit from the said account current maintained by him. In case, the credit taken by the manufacturer is less than the amount of refund determined, the manufacturer shall be eligible to take credit of the balance amount; (f) in case the manufacturer fails ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arty received the letter, they had already paid an amount of Rs. 20,19,827/- in cash being equivalent to the total excess amount of suo motu credit for the aforesaid period. This payment had been made on 4-4-2006. Still not satisfied, the department issued a show-cause notice, which was contested. The original authority held against the assessee and the first appellate authority sustained the order of adjudication. Hence the appeal before the Tribunal. 14. I think it is not necessary to dissect the aspect of excess credit having been suo motu availed by the assessee claiming under the Notification. Suffice it to say that an amount equal to the excess credit taken in PLA was paid by the party towards service tax on GTA services received by them during the material period. Incidentally, it may be noted that such service tax on GTA service had originally been paid by way of utilisation of CENVAT credit taken on input services. That debit in the CENVAT account still remains as credit to the Revenue. The cash payment of service tax on GTA Service also stands to the Revenue s credit. 15. The substantive issue has been addressed by the two sides in somewhat divergent ways. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... What they were doing was to utilise the entire input tax credit for payment of duty on the product not covered under the exemption notification, and paying full duty on the exempted goods and getting back full refund. It is submitted by the learned counsel that the payment made on 4-4-2006 by the assessee was perfectly in keeping with the above scheme. The learned counsel has also referred to the Tribunal s decision in Genus Electrotech Ltd. v. CCE, Rajkot [2008 (88) RLT 258 (CESTAT-Ahmd.)], wherein the learned Member (Technical) sitting singly allowed the benefit of Notification No. 39/2001-C.E. to the manufacturer whose factory was located in Kutch. It is pointed out that the benefit was allowed subject to reversal of an amount of CENVAT credit which had been wrongly availed by the party in contravention of the second proviso to sub-rule (4) of Rule 3 of the CENVAT Credit Rules, 2004. Similar benefit has been denied to the appellants in the present case. The learned counsel has also cited a line of decisions in support of her argument that the benefit of exemption Notification cannot be denied to a manufacturer where he has made good the breach of condition. Where the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been correctly determined, the manufacturer is liable to reverse the excess amount, if any, in their PLA. Admittedly, in this case, excess amount of duty was taken credit of in PLA over and above what was admissible. However, as the Assistant Commissioner/Deputy Commissioner did not determine the amount and intimate the same to them, the assessee was not in a position to do their part. It was as late as on 30-6-2006 that the Central Excise Officer intimated the excess amount of credit to the assessee. By that time, the assessee had already paid equivalent amount towards service tax on GTA service. If the above Notification is strictly construed, the relevant condition was violated by the Revenue. One who committed breach of the conditions of the Notification is not entitled to blame the other party to the transactions. 18. I find that the entire case of the Revenue is on the premise that the appellants committed breach of conditions of Notification No. 39/01-C.E. and hence they should pay back the entire amount of duty, of which credit had been taken in PLA under para 2A of the Notification. This case of the Revenue can hardly be sustained inasmuch as the assessee s breach, if a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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