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TMI Blog2022 (9) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... have complied with the restriction imposed in para 2A of the Notification 39/2001-CE. The claim of the Revenue is that if the appellant could have availed credit and have chosen not to avail the credit then the credit that appellant could have availed is to be treated as credit available to the appellant and since the appellant failed to use the credit available to the appellant, they have violated the condition prescribed in para 2A of Notification 39/2001-CE. It is apparent that the reason for introducing the restriction of full utilization of credit available is that the assessee does not misuse the exemption by taking credit and not using the same. Thereby, accumulating the credit and using it on a letter date when they get out of the notification no.39/2001-CE. It is seen that if the appellant does not take any credit then no such mal-practice can happen and no credit can be accumulated. Moreover, it also implies that the credit available would mean the Cenvat credit taken and available in the credit of Cenvat account and not the credit that the appellant could have possibly taken but did not avail. Moreover, in the instant case, since by not taking the credit the quantum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Act, 1944 (1 of 1944), read with sub- section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40of 1978), the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) other than goods specified in the Annexure appended to this notification and cleared from a unit located in Kutch district of Gujarat from so much of the duty of excise or the additional duty of excise, as the case may be, leviable thereon under any of the said Acts as is equivalent to the duty payable on value addition undertaken in the manufacture of the said goods by the said unit. Provided that in the case of a unit having an original value of investment in plant and machinery installed in the factory below rupees twenty crore on the date of commencement of commercial production in that unit, the exemption contained herein shall apply only for the first clearances upto an aggregate value no exceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. 25 Cement 75 Lime stone and gypsum 12A. 25 Cement clinker 75 Lime stone 13. 17 or 35 Modified starch or glucose 75 Maize, maize starch or tapioca starch 14. 18 Cocoa butter or powder 75 Cocoa beans 15. 72 or 73 Iron and steel products 75 Iron ore 15A. 29 or 38 Fatty acids or Glycerine 75 Crude palm kernel, coconut, mustard or rapseed oil 15B. 72 Ferro alloys, namely, ferro chrome, ferro manganese or silico manganese 75 Chrome ore or manganese ore 16. Any chapter Goods other than those mentioned above in S. Nos. 1 to 15 36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nth under consideration; (c) a manufacturer who intends to avail the option under clause (a) shall exercise his option in writing for availing such option before effecting the first clearance in any financial year and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year; (d) the manufacturer shall submit a statement of the total duty payable as well as the duty paid by utilization of CENVAT credit or otherwise and the credit taken as per clause (a), on each category of goods manufactured and cleared under the notification and specified in the said Table, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 15th of the month in which the credit has been so taken; (e) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall determine the amount correctly refundable to the manufacturer and intimate to the manufacturer by the 15th day of the next month to the month in which the statement under clause (d) has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of claim Amount of claim 04/2008 06.05.2008 1270359 05/2008 06.06.2008 1875543 06/2008 07.07.2008 2058792 07/2008 06.08.2008 1742986 08/2008 05.09.2008 1814293 09/2008 07.10.2008 1625153 10/2008 06.11.2008 1095290 11/2008 05.12.2008 1703034 12/2008 07.01.2008 1029902 01/2009 06.02.2009 898835 02/2009 09.03.2009 947884 03/2009 09.04.2009 961209 04/2009 06.05.2009 867670 05/2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l value of machinery, they have not taken CENVAT credit. This office deducted the amount equivalent to the amount of CVD paid by them from their re-credit claim and the same was upheld by the Commissioner (Appeals), Customs Central Excise, Rajkot vide OIA No. 24/2010/COMMR(A)/RAJ dtd. 11.01.2010. In view of above, it is amply clear that the claimant has violated the provisions of Para 2A of Notification No. 39/2001-CE dtd. 31.07.2001 and have irregularly claimed the re-credit which is bad in law and is liable for rejection. Accordingly. I reject the re-credit claims for the entire amount of Rs. 2,92,46,090/ (Two Crore Ninety Two Lacs Forty Six Thousand Ninety Only) for the months of April 2008 to February 2010 claimed irregularly by the assessee and direct the assessee to reverse the re credit taken for the months of April 2008 to February 2010 along with the interest at the applicable rate and for the applicable time. As laid down in Para 2C(e) of the Notification No. 39/2001-CE dated 31.7.2001 as amended, irregular credit taken is to be reversed within 5 days from the date of this communication, otherwise, the said irregular credit shall become recoverable under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NVAT Credit under CENVAT Credit Rules, 2004 seems to be optional and not compulsory which was not considered by lower authorities in proper perspective. In view of this, we set aside the impugned order, without expressing any opinion on merits of the case, keeping all the issues open, and remand the matter back to Commissioner (Appeals) to reconsider the issue fresh without issuing for amount as pre-deposit and come to a conclusion after following the principles of natural justice. 4. The matter was again decided by Commissioner (Appeals) vide order No. 234 to 235/2012/Commissioner(A)/RBT/RAJ dated 07.05.2012, the Commissioner (Appeals) again rejected the claim of the appellant with the following observations: 8. I have carefully gone through the facts of the case, Impugned order and order of the hon'ble CESTAT allowing the appeals of the appellant by way of remand, appeal memorandum and submissions made by the appellant at the time of personal hearing. I find that the issue to be decided in the present appeal is whether not taking credit on the inputs is violation of provisions for taking benefit of notification no. 39/2001-CE dated 31.07.2001 or otherwise. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their contention that the department has also accepted the contention and had passed their earlier claims related to last three years period. In this regard I find that whether to avail notification no. 39/2001 or not was optional for the appellant. however once they opted for the said notification it was mandatory for them to follow the conditions strictly. The manufacturer was required to first utilize whole of the CENVAT credit available to him. This was not an empty formality. It is the foundation for availing the benefits under the said notification. It cannot be said that they are mere proceduralrequirements, with no consequences attached for non-observance. The consequences are denial of benefits under the notification. For availing benefits under an exemption notification, the conditions have to be strictly complied with. Therefore, the lower authority endorsed the view that the exemption under notification no.39/2001 was not available to the appellants. On the facts found, the view is on terra firma. From the above discussion, it is apparent that the entire dispute hinges on the following question:- Whether the cenvat credit which could have been taken by a manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All goods 38 Any goods 5. 38 All goods 34 Any goods 6. 39 All goods 26 Any goods 7. 40 Tyres, tubes and flaps 41 Any goods 8. 72 or 73 All goods 39 Any goods, other than iron ore 9. 74 All goods 15 Any goods 10. 76 All goods 36 Any goods 11. 85 Electric motors and generators, electric generating sets and parts thereof 31 Any goods 12. 25 Cement 75 Lime stone and gypsum 12A. 25 Cement clinker 75 Lime stone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r challanged by the Revenue. It is apparent from the above calculation that the fact of taking, or not taking, the credit has not made any difference in the quantum of refund admissible to the appellant. This is so because the notification limits the credit available to the appellant to a percentage of the value addition specified in the Column (4) of the said Table in the Notification No.39/2001-CE.From the above, it is apparent that there is no extra refund admissible to the appellant on account of non availment of Cenvat credit. In fact, the appellant haspaid that much more duty in cash. 6.2 Learned counsel for the appellant has argued that there is no statutory stipulation that assessee has to mandatorily availed Cenvat credit on capital goods and inputs if they wish to avail the benefit of Notification No.39/2001-CE. Learned counsel argued that the notification merely required the appellant to avail the Cenvat credit available before paying any duty in cash . It has been argued by the Learned Counsel that if no credit is availed by them then no credit is available to them for use. Learned Counsel further pointed out that DOF letter of CBEC dated 04.06.2009 which has clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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