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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 ..... thereon as is equal to the duty payable on the value addition undertaken in the manufacture of the said goods by the said unit. The exemption mentioned in the aforesaid notification was provided by way of refund of duty paid on the goods cleared through PLA(other than that paid using Cenvat). The appellant were operating under the said notification from 01.03.2008 and had given an option to take credit of the amount calculated in the manner specified in the para 2 of the notification, in his account current maintained in terms of excise manual of supplementary instruction issued by the CBEC. The credit of refund amount was also taken by the appellant in the current account. The appellant had vide letter dated 01.03.2008 exercise their option for taking credit in terms of para 2C of Notification 39/2001-CE for the year 2008-2009. The relevant extract of the notification as it exists w.e.f 01.04.2008 are reproduced below. Exemption to exicable goods (except those specified in Annexure) cleared from units in Kutch (Gujarat). --- In exercise of the powers conferred by sub- section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub- section (3) of section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors 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 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 Any goods Provided that where the duty payable on value addition exceeds the duty paid by the manufacturer on the said excisable goods, other than the amount paid by utilization of CENVAT credit during the month, the duty payable on value addition, shall be deemed to be equal to the duty so paid other than by CENVAT credit. 2A In cases where all the goods produced by a manufacturer are eligible for exemption under this notification, the exemption contained in this notification shall be subject to the condition that the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 been submitted. In case the credit taken by the manufacturer is in excess of the amount determined, the manufacturer shall, within five days from the receipt of the intimation, reverse the said excess credit from the account current maintained by him. In case, the credit taken by the manufacturer is less than the amount of refund determined, the manufacturer shall be eligible to take credit of the balance amount; (f) in case the manufacturer fails to comply with the provisions of clauses (a) to (e), he shall forfeit the option, to take credit of the amount calculated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1040041 01/2010 11.02.2010 947884 02/2010 10.03.2010 859572 TOTAL 29246090 In support of the claim, the claimant has submitted copies of [1] ER-1 return [2] Personal Ledger Account for the period from April 2008 to February 2010 [both months inclusive]. I find that Para 2A of Notification No. 39/2001-CE dtd. 31.07.2001 stipulates that "In cases where all the goods produced by a manufacturer are eligible for exemption under this notification, the exemption contained in this notification shall be subject to the condition that the manufacturer first utilizes whole of the CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and pays only the balance amount in cash" accordingly, the claimant has first to avail CENVAT credit and to exhaust the it for the payment and then to pay the duty from the PLA and has to clear, the Re-credit for the payment of duty paid from PLA only. However, in the instant cases, I find that the claimant has not availed the CENVAT credit and have not thereby utilized the whole of the amount of CENVAT credit available for payment of Central Excise Duty first but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount in cash. In the instant case, since no amount of Cenvat Credit was availed, it was held that the appellant has not utilized the Cenvat Credit available to him for payment of duty first and since the appellant has paid the entire amount of duty under PLA the appellant has violated the condition prescribed under in para 2A of Notification No. 39/2001-CE dated 31.07.2001. 3. The order of the Deputy Commissioner was passed without issuing any Show Cause Notice and without granting any hearing to the appellant. The said order of Deputy Commissioner was challenged before Commissioner (Appeals) who vide order No. 482-504/2009-10 dated 14.03.2010 rejected the appeal filed by the appellant. The appellant challenged the same before Tribunal, who vide order No. A/1704- 1705/WZB/AHD/2011, dated 28.09.2011 set aside the order of Commissioner (Appeals) and remanded the matter for fresh decision to Commissioner (Appeals) with the following observations: "3. The issue in this case is regarding benefit of Notification No.39/2001-CE, dated.31.7.2001, which contemplates of allowing re credit to the assessees, who are situated in Kutch area, subject to condition that they utilized the entire C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption under the Notification No. 39/2001, as amended, as per para 2A of the said Notification. 10. I find that the appellant has not followed the basic condition of the notification no. 39/2001-C dated 11.07.2001. Para 2A of the said notification envisages the availability of exemption to the manufacturer only if whole of the Cevat credit available is availed and utilized on the last day of the month under consideration for payment of duty on goods cleared. And only after utilization of the Cevat the manufacturer becomes entitled for payment of balance amount of duty in cash. As the Cenvat credit in question was always available to the appellant which they did not utilized intentionally, I find it is clear violation of provisions for taking benefit of notification no. 39/2001-CE dated 31.07.2001. 10.2 It is settled law that in order to claim benefit of a notification, the terms of the notification must strictly comply with Especially for availing benefits under an exemption notification, the conditions have to be strictly complied with. The conditions of the notification have to be fully followed as held in plethora of cases some of which are given below: i) CCE, Chandigarh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 6. The notification 39/2001was introduced in order to promote the industry in disaster affected region of Kutch as a relief. The idea was to grant the special incentives to industriesso that they set up plants in the said region and generate employment etc.TheExemption Notification was carefully drafted and it was extended to all but a few items. The Notification also puts certain restrictions on the inputs that could be used for the said purpose as is apparent from the table in para 2A of the Notification 39/2001-CE Sr. No. Chapter of the First Schedule Description of goods Rate Description of inputs for manufacture of goods in column (3) (1) (2) (3) (4) (5) 1. 29 All goods 29 Any goods 2. 30 All goods 56 Any goods 3. 33 All goods 56 Any goods 4. 34 All goods 38 Any goods 5. 38 All goods 34 Any goods 6. 39 All goods 26 Any goods 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 clarified the phrase "Whole of the credit available" in respect of notification no.39/2001-CE. Learned counsel relied on the following extract of the said letter reads as under:- "2.The matter had been examined in consultation with TRU. Since CENVAT Credit rules do not prescribe a time limit for carrying forward the Cenvat Credit, a manufacturer can retain the unutilized credit in his books indefinitely till the end of tax holiday and utilized the same for payment of duty thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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