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TMI Blog2022 (10) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... eversed, the situation would be as if no credit was ever availed. This issue had come up for consideration before the Allahabad High Court in the case of HELLO MINERALS WATER (P) LTD. VERSUS UNION OF INDIA [ 2004 (7) TMI 98 - ALLAHABAD HIGH COURT] , wherein it is held that reversal of Modvat credit amounts to non-taking of credit on the inputs. Hence, the benefit has to be given of the notification granting exemption/rate of duty on the final products since the reversal of credit on the input was done at the Tribunal s stage. The appellant are eligible for exemption under Notification No. 30/2004-C.E. when they have reversed 6% of the value of exempted goods in terms of Rule 6(3)(i). It is found that the appellant s claim on the applicability of sub-rule (3D) of Rule 6 is also legally sustainable. The said sub-rule provides for a deeming provision to the effect that payment of amount under sub-rule (3) should be considered as credit not taken for the purpose of such exemption notification. The impugned order is unsustainable, and accordingly set aside - appeal allowed - decided in favor of appellant. - Excise Appeal No.11559 of 2019 and Excise Appeal No.11763 of 2019 - F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of central excise duty of Rs. 6,96,22,836/- on value of goods cleared during the period April 2016 to June 2017 along with interest and penalty and for amount of Rs. 3,34,18,901/- @ 6% already reversed under Rule 6(3) be declared invalid. In Adjudication process, the adjudicating authority vide its impugned order dated 30-8-2006 by denying the benefit of Notification No. 30/2004-CE dated 09.07.2004 confirmed the demand of Central Excise Duty amounting to Rs. 6,96,22,836/- along with interest and penalty and ordered for the appropriation of cenvat credit of Rs. 3,52,83,382/- against the determined duty liability which was reversed by the appellant. Being aggrieved with impugned order both department and M/s MSMPL filed the present Appeals before us. 02. Shri Goyal Rathi, learned Chartered Accountant appearing on behalf of the Appellant submits that the show cause notice issued by the department itself is bad-in-law as it is issued without following the procedure mentioned in Master Circular No. 1053/02/2017-CX. Dated 10.03.2017, therefore, the demand so confirmed based on impugned show cause notice is also bad-in-law and deserves to be set aside on this ground alone. 2.1 He al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by paying an amount of 6% of the exempted goods in view of Rule 6 of the Cenvat Credit Rules, 2004. Therefore, the benefit as claimed by the appellant may kindly be allowed. The allegation of revenue is contrary to the specific provisions of Rule 6(3D) of Cenvat Credit Rules, 2004 as it is a well settled law that once reversal of credit amount is done it tantamount to non availment of Cenvat Credit. The Board had issued a circular No. 845/03/2007-CX, dated 01.02.2007 which was further amended vide Circular No. 858/16/2017-CX dated 08.11.2017, in the said circular it was explicitly mentioned that textile articles falling under Chapter 50 to 63 of the Central Excise Tariff which are covered under conditional exemption Notification No. 30/2004 -C.E. dated 09.07.2004 would be covered under Rule 6 of the Cenvat Credit Rules 2004. He placed reliance on the following judgements:- CHANDRAPUR MAGNET WIRES (P) LTD. VS. COLLECTOR OF C.EX., NAGPUR 1996 (81) ELT 3 (SC). COMMISSIONER OF CENTRAL EXCISE VS. ASHIMA DYECOT LTD. 2009(240)ELT A41(SC) GLOBAL WOOL ALLIANCE PVT. LTD. VS. COMMISSIONER OF CENTRAL EXCISE 2017(358) ELT 1218 (TRI. MUMBAI) SPENTEX INDUSTRIES LTD. VS. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be satisfied qua non-availment of credit. In any case Rule 6(3D) of Cenvat Credit Rules 2004 creates an embargo to consider 6% payment at par with not-availing credit per se, in the context of specific requirement of exemption Notification, which has to be decided in terms of language of Notification and not based on CCR, 2004. He placed reliance on following decisions:- ARVIND MILLS LTD. 2009(240)ELT 613 (TRI. AHMD.) YHELLO MINERAL WATER PVT. LTD. 2004 (163) ELT 55 (TRI. DEL) DILIPCHHABRIA DESIGNS PVT. LTD. 2015 (323) ELT 565 (BOM.) SPENTEX INDUSTRIES LTD. 2010 (253) ELT 225 3.2 He also submits that even subsequent reversal of the credit in Feb. 2019 as contended by them will not make them eligible for the exemption Notification No. 30/2004 -CE dated 09.07.2004. 04. We have Heard both the sides and considered the submissions from both the sides and perused the record. Short issue required to be decided in this matter is as to whether such reversal of credit, either by payment of 6% in terms of Rule 6 or by debiting the same from the Cenvat credit account, would result to satisfying the condition of notification No. 30/2004-CE in question. The conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification granting exemption/rate of duty on the final products since the reversal of credit on the input was done at the Tribunal s stage. While arriving at this conclusion, the Allahabad High Court has referred to various judgments under which such reversal was made subsequently and still the benefit was given to the assessee. 4.2 We also find that the appellant are eligible for exemption under Notification No. 30/2004-C.E. when they have reversed 6% of the value of exempted goods in terms of Rule 6(3)(i). We find the appellant s claim on the applicability of sub-rule (3D) of Rule 6 is also legally sustainable. The said sub-rule provides for a deeming provision to the effect that payment of amount under sub-rule (3) should be considered as credit not taken for the purpose of such exemption notification. The appellant s case is covered by the said provision as pointed out by the learned Counsel for the appellant. We find the case laws relied on by the learned Counsel for the appellant clearly support their contention. The decisions of the Tribunal in Life Long Appliances Ltd. (supra), was affirmed by the Hon ble Supreme Court reported at 2006 (196) E.L.T. A144 (S.C.). We find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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