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TMI Blog2023 (1) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case exemption notification No. 30/2004-CE, being a conditional one, bar of lapsing of credit shall not apply. The issue was considered in the case of M/S PATODIA FILAMENTS PVT. LTD., SHIVKARAN CHOUDHARY VERSUS C.C.E. S.T., -VAPI (VICE-VERSA) [ 2019 (4) TMI 435 - CESTAT AHMEDABAD] where it was held that In the present case all the conditions enumerated under sub rule 3 (i) has been followed by the Appellant and he is not required to reverse the entire credit lying in balance on the date of opting notification No. 30/2004 CE dated 09.07.2004. Therefore, the balance credit is not liable to be reversed. For the same reason the credit utilised by him for clearance of finished goods or capital goods. The issue is no longer res integra - Appeal allowed. - EXCISE Appeal No. 11587 of 2015-DB with Excise Appeal No. 11731 of 2015, 11776 of 2015, 10077 of 2016, 11304 of 2016, 11306 of 2016, 10524-10525 of 2019, 11620 of 2015, 11778 of 2015, 10078 of 2016, 10412-10415 of 2013 - A/10071-10085/2023 - Dated:- 20-1-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Sh. Suyog Bhave, Shri Mohit Rawal, Advocates for the Appellant Sh. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision of Rule 11(3) of Cenvat Credit Rules, 2004, the bar of lapsing of credit is applicable only when the assessee avail the absolute exemption notification. Therefore, in the present case exemption notification No. 30/2004-CE, being a conditional one, bar of lapsing of credit shall not apply. This issue has been considered in various judgments as cited by the appellant, which are reproduced below: Patodia Filaments Pvt Ltd.Vs. Commr- 2019 (4) TMI 435- CESTAT, Ahmedabad. 6. Heard both the sides and perused the records. We find that the notification No. 30/2004-CE dated 09.07.2004 is not an absolute notification but a conditional notification issued under section 5A. The notification has the condition of non availment of cenvat credit. The sub-rule (3) (i) and (ii) of Rule 11 of the CCR, 2004 are separate. In the present case the sub rule 3 (i) would thus apply as per which the manufacturer is required to pay an amount equivalent to the CENVAT Credit in respect of inputs used in the manufacture of said final product and is lying in stock or in process or is contained in final product lying in stock. In the present case all the conditions enumerated under sub rule 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case too, the goods are conditionally exempt, as is evident from S.No.10 of the notification no.30/2004. As the goods are not absolutely exempt and the exemption is granted only on fulfillment of certain conditions, clearly Rule 11(3) (1) of the Rules of 2004 would apply. The said R21 reads as follows:- (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if,- (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or 5. In the present case as well, the exemption is not absolute but conditional upon fulfillment of certain stipulations. The assessee was entitled to the benefit of Rule 11(3)(i) of the Rules of 2004. 6. The Court is, therefore, of the opinion that no substantial question of law arises in this appeal. The present appeal is accordingly dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.1 Since the Notification No. 30/2004-CE dated 09.04.2007 contains the above condition the notification is not absolutely therefore, the situation of the appellant is covered under Rule 11(3)(i) according to which the appellant is required to pay an amount equivalent to Cenvat Credit, if any taken by him in respect of inputs received for used in the manufacture of said final product and is lying in stock or in process or is contained in the final product or lying in stock but if the Notification is absolutely having no condition in terms of Rule 11(3)(ii) the remaining credit shall lapse and shall not be allowed to be utilized. The case of the appellant is covered by rule 11(3) (i) therefore, the remaining credit shall not lapse. One of the contention by the adjudicating authority is that even though the argument of the appellant that the Cenvat credit balance will lapse as per Rule 11(3) only, the product is exempted absolutely is accepted there is no dispute that Notification No. 30/2004- CE has been issued under section 5A of the Central Excise Act, 1944 and the appellants having opted for the same, cannot escape from the obligation relating reversal of balance Cenvat Credit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to lapse the remaining credit after reversal on input as such, input in process and input contained in finished goods. The relevant judgments are reproduced below:- CCE Vs. Orient Syntex- 2020 (40) GSTL 56 (T) 5. We find that there is no dispute on the fact that the respondent has opted for exemption Notification No. 30/2004-C.E., which carries the following conditions :- Provided that nothing contained in this Notification, which shall apply to the goods in respect of which credit of duty on inputs has been taken under the provisions of Cenvat Credit Rules, 2004. 6. As per the above condition, the exemption Notification No. 30/2004-C.E. is not an absolute exemption. The provision for lapsing of credit is provided in Rule 11(3). (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the Cenvat credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equential reliefs, if any. Revenue s appeal being involved the amount less than Rs. 20 Lacs is dismissed on the ground of Government s litigation policy instruction F.No. 390/Misc/116/2017-JC, dated 11-7-2018. 7.2 In the case of Kanchan India Ltd.(supra), the Co-ordinate Bench of CESTAT, Delhi has taken the following view :- 6.After going through the impugned order and appeal papers, we are of the considered [view] that similar view has been taken by the various coordinate benches, which is as under : 3. Ld. Advocate for the appellant while relying upon the decision of Jansons Textile Processorsv.Commissioner, Central Excise ST Salem- 2018 (7) TMI 850 (CESTAT), Chennai has submitted that the present case is squarely covered under the said decision. Actually Rule 11 subrule (1) of CCR is applicable to him. It is impressed upon that decision under challenge has wrongly relied upon Rule 11 sub-rule (2) of CCR while denying utilization of the unutilized credit with the appellant. Order is accordingly prayed to be set aside and appeal is prayed to be allowed. 4.Ld. DR while justifying the impugned order has impressed upon findings in para 21.2 thereof. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to separate two closely related independent clauses, or is a particle used to connect words, phrases or classes representing alternatives [J. Jayalalitha v. UOI- (1999) 5 SCC 138]. Only if the phrasing of the legal provision is such that in actuality and is intended, should it be examined whether the alternatives separated by or are not mutually exclusive. The Courts may construe or as and , only if they find from the context that the wrong word must have been used. [Ranchhoddas Atmaram v. UOI, AIR 1961 SC 935; Firoj Farukee v. State of West Bengal, AIR 1972 SC 2141] . However, in respect of the sub-rule 3(i) and sub-rule 3(ii) ibid, there should not be any such confusion or doubt, since those two sub-rules are separated not by just a particle or but also by a semicolon (;), thus creating an additional wall for conveying mutual exclusivity between the two sub rules. There is also no basis for suggesting that the use of or between these sub-rules conveys the meaning or both . For example, to be able to impose both a fine and a penalty, one would need to add or both to the end of the phrase. That surely is not the case here. 5.3 Viewed in this context, it is bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : RULE:-11.Tansitional provision .... .... ..... (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the finalproduct lying in stock, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or (ii) the said final product has been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported. 5.2 It is pertinent to note that the sub-rule 3 (i) and sub-rule 3 (ii) are separated by a semicolon ( ; ) followed by the disjunctive or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessees who are confronted with absolute exemption in respect of final product/s manufactured by them, in which case the entire balance of cenvat credit lying in his account shall lapse and the same shall not be allowed to be utilized for payment of duty for home consumption or for export. 5.6 Hence, in sub rule 3 (i) ibid, the assessee has to opt for the exemption whereas in sub-rule 3 (ii) ibid, there is no such option available to the assesse and the absolute exemption that may have been brought forth under Section 5A ibid would apply unilaterally to the related final product manufactured by the assessee. 5.7 It is important to note that the law makers have not incorporated the requirement of payment of cenvat credit equivalent to credit taken by the assessee in respect of inputs lying in stock or in process in sub rule 3 (ii) ibid. In our view, this is because once the entire cenvat credit account is reduced to naught, there will be no cenvat credit that will be available whatsoever, under sub-rule 3 (ii) ibid, for the assessee to avail. 6 6. In the event, the findings and decision of the lower appellate authority to the contrary in the impugned order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely under Section 5A of Central Excise Act. But since the Notification No. 30/2004-CE dated 09.07.2004 is a conditional notification, hence only Rule 11 (3)(i) of CCR would apply which does not mandate any such lapsing. 6. We draw our support from the decision of CESTAT- Chennai in the case of Janson Textile Processors Vs. Commissioner of Central Excise ST Salem wherein it was held as follows:- 5.1 The core issue that comes up for decision is whether the transitional provisions contained in sub-rule (3) of Rule 11 will be applicable to both sub-rules 3 (i) and 3 (ii). For better understanding, the relevant provisions relating to manufacturers are reproduced as under: RULE 11.Transitionalprovision. .... .... ..... (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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