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TMI Blog2010 (8) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... ster falling under CETH 5402 and polyester textured yarn (PTY)/PFY falling under CETH 5402 of CETA, 1985. PTY is manufactured by processing the POY. 2. National Contingency Calamity Duty (NCCD) was levied "as a duty of excise by way of surcharge" vide Section 136 of Finance Act, 2001. The levy of NCCD was extended to the product i.e. yarns, manufactured by the applicant vide Section 169 of the Finance Act, 2003. It was levied at 1% ad valorem. 3. As per the Notification No. 46/2003-C.E. dated 17-5-03, goods falling under CETH 54.02 were wholly exempt from NCCD, if manufactured out of goods falling under CETH 54.02. Accordingly, the appellant was availing the benefit of exemption from June, 2003 onwards in respect of PTY manufactured out of POY, both falling under CETH 54.02. However, the PTY falling under CETH 5402 was liable to the basic excise duty. 4. The appellant availed exemption in respect of NCCD for yarn manufactured and captively consumed under Notification No. 67/95-C.E. The appellant also availed exemption in respect of NCCD on yarn cleared to 100% EOUs under Notification No. 1/95-C.E. 5.A case was made out against the appellant, vide show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption exemption benefit under Notification No. 67/95-C.E. is admissible, the issue of inadmissibility of cenvat credit availed by the appellant of such NCCD paid on captive consumption, at the insistence of the department, becomes redundant. 11.2 It is also submitted that even otherwise, there is nothing amiss in the manner in which the appellant has availed the cenvat credit of NCCD on duty payment on captive consumption. In cases other than captive consumption, where goods are received under cover of invoices issued by the supplier, the cenvat credit scheme permits immediate cenvat credit availment in as much as the manufacturer is not obliged to wait until the supplier actually deposits the duty with the government. Movement of goods for captive consumption is treated as "removal" for the purpose of levying and collecting duty of excise. Hence, what applies to physical removal of goods applies to goods moved for captive consumption, including the availment of cenvat credit. 11.3 Similarly, by way of an analogy, in cases where goods are cleared under invoice on duty payment and are returned in the same month, the manufacturer, while availing cenvat credit under R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit was taken on the basis of invoices without paying duty. The learned advocate submitted that since the demand for NCCD was quashed and set aside by the Tribunal vide its Order No. A/2689/WZB/AHD/2009 dated 3-12-09 wherein it was held that POY was eligible to be cleared without payment of NCCD under Notification No. 67/95-C.E., non payment of NCCD in cash while issuing supplementary invoice is no longer on time. 14. Initially the assessee were paying NCCD only on the clearance of POY for home consumption and no NCCD was being paid by them on the clearances of POY for captive consumption for use in the manufacture of PT4 or on the clearances of POY free of duty to 100% EOUs by availing the benefit of Notification No. 1/95-C.E. dated 1-4-95. Since, the captive consumption Notification No. 67/95-C.E. dated 16-3-95 applicable for the goods cleared for captive consumption for use in the manufacture of other excisable goods and Notification No. 1/95-C.E. applicable for the excisable goods cleared to 100% EOUs did not exempt the NCCD, the DGCEI booked a case of evasion of NCCD against the assessee in respect of clearances of POY to 100% EOUs. Accordingly a show cause Notice No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit, which was nothing but dummy credit, which was used for payment of NCCD for captive consumption clearances of POY during the period from March, 03 to July, 04. Thus, NCCD credit of Rs. 1,18,21,343/- taken by the assessee which was used for showing the payment of NCCD on captive consumption clearances of POY during the period from March, 03 to July, 04, had been taken on the basis of supplementary invoices in respect of which no duty had been paid either by debiting it in the PLA or by debiting from the basic excise duty credit. It thus, appeared that the assessee had taken this NCCD credit in a fraudulent manner and since the same had been utilized by the assessee for payment of NCCD on captive clearances of POY for the period from March, 03 to July, 04, the same appeared to be recoverable from the assessee alongwith interest at the applicable rate on it as per the provisions of Rule 12 of Cenvat Credit Rules, 2002/Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944. 15.The order passed by this Tribunal dated 3-12-09 does not help the appellants in any manner. It has to be noted that with effect from 17-5-03, the situatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has culminated into final adjudication orders and finalization of proceedings. The clock cannot be reversed back at this stage. Therefore we have to consider whether the cenvat credit availed by the appellants on the basis of invoices issued on 31-8-04 was admissible or not and if it was not admissible, the appellants are liable to pay the same. The discussion above clearly shows that credit was taken knowing fully well that no duty had been paid. Rule 9 of Cenvat Credit Rules, 2004 also provides that the burden of proof regarding the admissibility of the cenvat credit shall be upon the manufacturer taking the credit. In this case what is being demanded is the credit taken and not the duty paid on the POY. As discussed above the credit taken was wrong and therefore the order of this Tribunal holding that duty could not have been paid on the POY also will be of no help to the appellants. Once it is held that cenvat credit taken is wrong, and the same has been taken on the basis of the documents knowing fully well that no duty has been paid, suppression of fact, mis-declaration and fraud is involved. Therefore the cenvat credit can rightly be demanded under Rule 14 of Cenvat Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to account. In view of the above, we uphold the appeal filed by the appellants in respect of the second issue concerning the demand for NCCD credit amounting to Rs. 1,28,04,499/-. 18. In view of the above discussion, demand for NCCD credit is upheld amounting to Rs. 1,18,21,343/- taken by the assessee on the basis of supplementary invoices dated 31-8-04 under proviso to Section 11A(1) of Central Excise Act, 1944 with interest as applicable. Further penalty equal to the duty demanded is also upheld as per the provisions of Rule 15 of Cenvat Credit Rules, read with Section 11AC of Central Excise Act, 1944. However, we notice that the Commissioner had not indicated the option available to the assessee to make the payment of duty, interest and 25% of the duty towards penalty within thirty days of the order. Therefore following the ratio laid down by this Tribunal in the case of Swati Chemicals Industries Ltd. reported in 2009 (248) E.L.T. 421, the appellants are given an option to pay the duty amount demanded (if not already paid), interest thereon and penalty to the extent of 25% within thirty days of the date of receipt of this order. It is made clear that if any of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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