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TMI Blog2010 (10) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... s being availed in which mandatory condition to avail the substantive benefit is the utilization of the Cenvat credit, can assessee at his will opt out midway to avail the benefit under Income Tax Act, 1962, thus rendering mandatory condition of exemption notification inapplicable? Whether Tribunal erred in not following its own decision, in the case of M/s. Pranam Industries Ltd. in Appeal No. E/3758/2005? Held that:- Reversal of credit before utilization amounts to not taking credit and as such it cannot be said that the assessee had violated the provisions of the subject notification. In the circumstances, the Tribunal was justified in holding that when the clearances started from the assessee’s unit there was no Cenvat credit avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o opt out of option once exercised? 3. Whether in a situation where benefit of an exemption notification is being availed in which mandatory condition to avail the substantive benefit is the utilization of the Cenvat credit, can assessee at his will opt out midway to avail the benefit under Income Tax Act, 1962, thus rendering mandatory condition of exemption notification inapplicable? 4. Whether Tribunal erred in not following its own decision, in the case of M/s. Pranam Industries Ltd. in Appeal No. E/3758/2005? 2. The respondent, at the relevant time was a new industrial unit, engaged in the manufacture of excisable goods. The respondent s unit was set up in Kutch District after 31st July, 2001 with original value of invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the assessee had violated the provisions of the subject notification; that the Cenvat credit balance of Rs. 2,68,08,644/- should have been utilised by the assessee in accordance with the provisions of the said notification whereas the assessee had claimed excess refund under the said notification to the tune of Rs. 2,68,08,644/- being unutilised balance in its Cenvat credit account as on 31st December, 2004. The show cause notice came to be adjudicated vide order dated 27th December, 2007 whereby demand of Rs. 2,68,08,644/- came to be confirmed under Section 11A of the Act along with interest at the appropriate rate. The assessee carried the matter in appeal before Commissioner (Appeals) but did not succeed. However, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods credit at Rs. 2,68,08,644/-. The unit started commercial production on 14th January, 2005. The assessee decided to forego the credit available on the capital goods as it intended to avail depreciation under Section 32 of the Income Tax Act, 1961 on the value of capital goods which represented excise duty. The assessee, therefore, reversed the credit on 31st January, 2005 in its monthly return for the month of January, 2005 and showed the credit balance of capital goods as nil and paid the central excise duty on goods cleared by it from PLA. According to the revenue, the credit once taken in the Cenvat account could not have been reversed and the same should have been utilized in terms of the subject notification for payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation under Section 32 of the Income Tax Act, 1961 even in respect of the central excise duty component, before utilizing the credit it reversed the same, consequently the opening balance in the month of January, 2005 was Nil. The assessee commenced commercial production on 14th January, 2005 and paid the excise duty on clearances made by it from PLA. According to the respondents, credit once having been taken, it was not permissible for the assessee to reverse the same and that the credit taken had to be utilized in accordance with the subject notification. 8. In this regard, it may be germane to refer to the decision of the Supreme Court in the case of Commissioner of C. Ex., Mumbai-I v. Bombay Dyeing Mfg. Co. Ltd. - 2007 (215) E.L.T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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