9911796707
TMI Blog2007 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Revenue is that the matter is governed by Rule 3(6) of the Cenvat Credit "Rules, 2001 rather than Rule 3(3) and that Cenvat credit of AED (T & TA) could be utilised only towards payment of AED (T & TA). Similarly, Cenvat credit of AED (GSI) could be utilised only for payment of AED (GSI). Learned counsel has reiterated the case of the appellants and has relied on the Tribunal's decision in Commissioner of Central Excise, Ludhiana v. Malwa Industries Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It has been argued that sub-rules (1) and (6) of Rule 3 of the Cenvat Credit Rules, 2001 have got to be read together to gather the legislative intent. Learned SDR has urged that the restrictions placed by the legislative authority under sub-rule (6) for a manufacturer of final product in the matter of availing the benefit of Cenvat credit allowed under sub-rule (1) of Rule 3 of the Cenvat Credit Rules, 2001 have to be given full effect to, in which event the appellants will no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, therefore, the right of a manufacturer of final products to utilise Cenvat credit of any of the specified duties of excise paid on inputs, for payment of any duty of excise on any final products was not affected by anything contained in sub-rule (6). He has also referred to the corresponding provisions of the Cenvat Credit Rules, 2004. Sub-rule (4) of Rule 3 of the Cenvat Credit Rules, 2004 corresponds to sub-rule (3) of Rule 3 of the Cenvat Credit Rules, 2001. Sub-rule (7)(b) of the Cenvat Credit Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 reads : "Notwithstanding anything contained in sub-rule (1)". The enacting part of sub-rule (6), relevant to the present case, is clause (b), which says that Cenvat credit in respect of (i) AED (T &TA); (ii) AED (GSI); (iii) NCCD and (iv) CVD shall be utilised only towards payment of AED (T &TA), AED (GSI) and NCCD respectively. Thus sub-rule (6)(b) provides for manner of utilisation of CENVAT credit of various duties of excise. On the other hand, sub-rule (1) is the main provision which confers the right to take Cenvat credit of specified duties paid o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 department and, therefore, the allegation of suppression was baseless. Learned Counsel further submitted that, in a letter dated 6-11-2001 to the jurisdictional Assistant Commissioner of Central Excise, the appellants had informed the department that they had been availing Cenvat credit and proposed to avail henceforth the deemed credit facility under Notification No. 7/2001-C.E. (N.T.) dated 1-3-2001 (as amended). At the time of switching over to the deemed credit scheme in November, 2001, copies of the relevant invoices were made available to the department and credit of AE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 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 disclosed that they had utiised AED (T & TA) for payment of AED (GSI) and BED on final products during the period of dispute. This case of the appellants has not been successfully rebutted. It is, therefore, held that, on the facts of this case, it was not open to the department to invoke the extended period of limitation under Section 11A(l) for recovery of duty from the appellants. The demand is time-barred.
8. In the result, the impugned order is set aside and this appeal is allowed.
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