9911796707
TMI Blog2013 (7) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Tariff Act, 1985. They were availing the benefit of exemption Notification Nos. 29/2004-C.E. and 30/2004-C.E. both dated 9-7-2004 for their products. Notification No. 29/2004-C.E. specified rate of duty for 100% cotton fabrics at 4% ad valorem. Vide Notification No. 58/2008-C.E., dated 7-12-2008 effective rate of duty for 100% cotton fabrics was changed to NIL by amending Notification No. 29/2004-C.E. Another Notification No. 59/2008-C.E., dated 7-12-2008 also specified rate of duty @ 4% for Cotton Fabrics. 2.1 During the period from 1-2-2009 to 31-3-2009, the applicants cleared goods for export under claim of rebate on payment of duty @ 4% under Notification No. 59/2008-C.E. even though there was unconditional exemption from duty by Notification No. 29/2004-C.E. as amended. Subsequently they filed various rebate claims of the duty paid on the finished goods. It was also noticed that the applicants availed Cenvat credit on inputs and capital goods. As per Section 5A(1A) of the Central Excise Act, 1944 where an exemption from whole of the duty of excise has been granted absolutely, the manufacturer has no option to pay duty. Since 100% cotton fabrics were exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vail exemption accordingly. It is also well settled position of law that each removal is to be assessed independently and therefore each removal would be subject to claim of exemption notification. Therefore at the time of each removal applicant have a choice as to which notification to follow. Applicant begs to refer to and rely upon following decisions to support the above submission that applicant have choice of notification when two notifications are operative. These decisions are not dealt with by Assistant Commissioner in the order-in-original. 1. CCE v. Indian Petrochemicals - 1997 (92) E.L.T. 13 (S.C.). 2. HCL Ltd. - 2001 (130) E.L.T. 405 (S.C.). 3. Shree Medical Care - 2007 (209) E.L.T. 321 (S.C.). 4.4 It is submitted that the question of applying Section 5A will not apply when applicant have two notifications simultaneously operating. The section will apply only if there is only one notification providing exemption absolutely. It would be appreciated that any other reading of the section will have the effect of rendering the other notification redundant. If the logic of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the amended notifications and the nature of notifications does not change. Therefore, it is incorrect to reject this circular on the ground that no circular is issued for subsequent notifications. It is obvious that when the situation is similar the earlier clarification will still be applicable. Thus the rejection of the submission and not following the circular in the OIO is incorrect. In the impugned order the submission regarding simultaneous exemption and concessional rate is misread and unnecessary and irrelevant comparison about other entries in the notification is made. The difference as regards other entries not relevant to the present case does not make any meaningful purpose so long as the undisputed facts remains that the product of the applicant are covered by both the notifications and are subjected to different rate. Therefore, the finding in paras 11 & 12 is erroneous, based on irrelevant consideration. 4.10 In para 16 of the impugned order the Appellate Commissioner has observed that when goods were removed for domestic consumption, full exemption was claimed whereas concessional rate was preferred for export clearance so as to encash the credit. It is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground stated in para 4 above. 8. Government observes that main issue to be decided is whether applicant entitled to rebate of duty in these cases where duty was paid in violation of provisions of Section 5A(1A) of CEA 1944 and whether the provision of Section 5A(1A) are attracted in this case or not. The issue regarding confirmation of demand of wrongly availed Cenvat credit is now pending before CESTAT and the pleading made regarding Cenvat credit issue are not required to be considered by this authority. 8.1 In order to properly appreciate the issue, the provisions of Section 5A(1A) of CEA 1944 are reproduced below :- "(1A) For removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods." It is quite clear from the plain reading of the said statutory provision that manufacturer applicant has no option to pay duty when goods are exempted from whole of duty of excise unconditionally under a Notification issued under Section 5A(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat C.B.E. & C. Circular No. 795/28/2004-C.E., dated 28-7-2004 clarifying that Notification No. 29/2004-C.E. & 30/2004-C.E. can be availed simultaneously will also apply to the amended notification as the nature of notification does not change does not hold good because a specific Circular No. 937/27/10-C.E., dated 26-11-2010 was issued by C.B.E. & C. w.r.t. Notification Nos. 29/2004-C.E. as amended by Notification No. 58/2008-C.E., dated 7-12-2008 and Notification No. 59/2008-C.E., dated 7-12-2008. So the Circular dated 26-11-2010 is rightly held applicable in this case by Commissioner (Appeals). Recently, Board vide its Circular No. 940/01/2011-CX., dated 14-1-2011 has clearly stated that the manufacturer cannot opt to pay the duty in respect of unconditionally fully exempted goods and he cannot avail the Cenvat credit of the duty paid on inputs. The instruction of the Board is binding on the department as held by the Hon'ble Supreme Court in the case of Dhiren Chemicals Industries Ltd. v. CCE, Vadodara - 2002 (139) E.L.T. 3 (S.C.) circular. 9. In view of above circumstances and discussions, Government finds no infirmity in the impugned orders-in-appeal and therefore uphold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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