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TMI Blog2007 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Additional Duties of Excise (Goods of Special Importance) Act, 1957] on their final products during the period July-October, 2001, demanded interest thereon under Section 11AB(1) of the Central Excise Act and imposed a penalty on the party under Rule 13 of the Cenvat Credit Rules, 2001 read with Section 11AC of the Central Excise Act. In an appeal filed by the assessee, the Commissioner (Appeals) found that they had reversed an amount of Rs. 3,65,662/-before the issue of the show cause notice. The appellate authority sustained the demand of the balance amount of Rs. 32,40,810/-. It also reduced the quantum of penalty to the same extent. The present appeal is against the appellate Commissioner's order. 2. After examining the records and hearing both sides, we note that the substantive issue arising for consideration is whether Cenvat credit of AED (T TA) could be utilised for payment of other types of duties of excise viz. BED, AED (GSI) etc. According to the appellants, under Rule 3(3) of the Cenvat Credit Rules, 2001, a manufacturer could utilise Cenvat credit for any duty of excise on any final product without any restriction. On the other hand, the case of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -C.E. (N.T.) dated 28-2-1999 issued by the Central Government under Rule 57A of the Central Excise Rules, 1944. The said Notification specified certain duties viz. (i) Basic Excise Duty and Special Excise Duty leviable under the Central Excise Act; (ii) AED leviable under the Additional Duties of Excise (T TA) Act, 1978; (iii) AED leviable under the Additional Duties of Excise (GSI) Act, 1957 and (iv) Additional duty of Customs leviable under Section 3 of the Customs Tariff Act, to be specified duties for purposes of Modvat credit under Rule 57A ibid. The Notification also laid down certain restrictions for utilisation of the credit. It was provided that credit of duty paid on input under the Additional Duties of Excise (T TA) Act could be utilised only for payment of AED (T TA) and it was similarly provided that credit of AED (GSI) paid on input could be utilized only for payment of AED (GSI). The endeavour of learned SDR was to establish the legislative intent underlying equivalent provisions like sub-rule (2) of Rule 57AB of the Central Excise Rules, 1944, sub-rule (6) of Rule 3 of the Cenvat Credit Rules, 2001 and sub-rule (7) of Rule 3 of the Cenvat Credit Rules, 2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he additional duty of excise under Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978; (ii) the additional duty of excise under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957; (iii) the National Calamity Contingent duty under Section 136 of the Finance Act, 2001; and (iv) the additional duty under Section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i), (ii) and (iii) above, shall be utilised only towards payment of duty of excise leviable under the said Additional Duties of Excise (Textiles and Textile Articles) Act, or under the said Additional Duties of Excise (Goods of Special Importance) Act, or the National Calamity Contingent duty under the said Section 136 of the Finance Act, 2001 respectively, on any final products manufactured by the manufacturer or for payment of such duty on inputs themselves if such in puts are removed as such or after being partially processed; (c) ………. (d) (emphasis added) It has been argued by learned Counsel to the effect that the non obstante clause in sub-rule (6) had nothing to do with sub-rule (3) and, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision has overriding effect. It was held to this effect, in the case of Jindal Poly Films Ltd. v. Commissioner of Central Excise, Meerut-II [2006 (198) E.L.T. 3 (S.C.)], by the Hon'ble Supreme Court referring to Rule 57B(1) which read: "Notwithstanding anything contained in Rule 57A, a manufacturer of final products shall be allowed to take credit of the specified duty on the following goods". It was held that the goods which had been specified under Rule 57B(1) had been given a special treatment different from the treatment given to the goods specified under Rule 57A as sub-rule (1) of Rule 57B opened with a non obstante clause. In the case of Indica Laboratories Pvt. Ltd. v. Commissioner of Central Excise, Ahmedabad [2007 (213) E.L.T. 20 (Tri.-LB)], a Larger Bench of this Tribunal took note of the non obstante clause in sub-section (2) of Section 4A reading "Notwithstanding anything contained in Section 4" and held that the provisions of Section 4A were overriding in nature vis-a-vis those of Section 4. The dispute in the present case revolves round the non obstante clause occurring in sub-rule (6) of Rule 3 of the Cenvat Credit Rules, 2001, which rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under sub-rule (3) can be availed only to the extent permitted under the restrictive provision viz, sub-rule (6). SDR was right when he argued that the two sub-rules should be read together. 5. In the result, the appellants could have utilised Cenvat credit of AED (T TA) only towards payment of the same kind of duty of excise i.e., AED (T TA) in terms of Rule 3(6)(b) of the Cenvat Credit Rules, 2001. In fact, they utilised Cenvat credit of AED (T TA) paid on their inputs, for payment of BED and AED (GSI) on their final products. This was not permissible in law. The appellants, therefore, do not have a case on merits. 6. It was also pointed out by learned Counsel that the entire demand of duty was beyond the normal period of limitation. The demand is for the period July-October, 2001 and the show cause notice was issued on 24-4-2003. Learned Counsel submitted that there was no contravention of any rules by the appellants with intention to evade duty and, therefore, the extended period of limitation could not be invoked in the case. It was submitted that the taking of credit of AED (T TA) and utilisation thereof for payment of AED (GSI) were always known to the departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (T TA) and utilised the same for payment of AED (GSI) and BED on their final products. In the case of Kirloskar Oil Engine Ltd. (supra), the allegation of irregular availment of MODVAT credit, raised in the show-cause notice, was based on RT-2 returns, RG-23 accounts and gate passes. In a corrigendum to the show-cause notice, the department raised a further allegation of suppression of facts by the assessee. The Tribunal held that there was no suppression. In the case of Hindustan Lever Ltd. (supra), the department invoked the extended period of limitation for recovery of duty on certain quantity of excisable goods found to have been clandestinely removed. The Tribunal found that the demand was based on RT-12 returns filed by the assessee and on this basis held that the extended period of limitation was not invocable. The case law thus supports the contention of the appellants that they cannot be held to have suppressed any fact inasmuch as they had been filing periodical returns and connected documents and had also supplied documentary materials to the department at the stage of switching over to the deemed Modvat credit scheme, which documents, if verified, would have d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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