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TMI Blog2008 (6) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... d P.K. Das, Member (Judicial) Shri Ravi Raghavan, Advocate, for the Appellant. Shri H.K. Thakur, JCDR, for the Respondent. [Order per: M. Veeraiyan, Member (Technical)] - This is an appeal against the order of the Commissioner No. 01/Commr/PKL/2007 dated 24.01.2007. 2. Heard both sides. 3. The relevant facts, in brief, are as follows:- (a) The applicant is fabricating bus bodies on duty paid chassis received from M/s Tata Motors, the manufacturer of chassis. (b) While clearing the chassis, M/s Tata Motors have paid the applicable duty including Rs. 10,000/- additional basic excise duty leviable on chassis imposed in the Budget of 2003. (c) The appellant received the duty paid chassis and from August 2003, tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 5A (1A) cannot be applied in such a situation. (b) The view taken by the Commissioner that in terms of explanation to Rule 3(7) of Cenvat Credit Rules, they are not eligible to take credit is incorrect. They have procured the chassis on which duty has been paid; credit was taken on the duty paid on the chassis and other materials. The body built vehicle has discharged duty on the entire value of the said body built vehicle including the value of chassis. The condition of the notification is that it debars only the credit relating to chassis. (c) Even if there was partial exemption for any goods, the credit of duty paid on the inputs cannot be denied in terms of rule 3. The intention of rule 3(7) is that a person availing a noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. on value inclusive of value of chassis. In other words, benefit of Notification No. 6/2002 dated 01.03.2002 has not been availed by them. 7.2. The submissions that Notification No. 6/2002 being conditional granting only partial exemption cannot be forced on them is valid. Section 5A (1A) reads as follows:- (1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods as they have not fulfilled the condition for availing the said notification. The said notification is a conditional notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 6/2002. This is basically a consequence of extra duty on the chassis alone. 8.1. When Section 5A (1A) does not compel the appellant to avail the exemption notification like 6/2002, it cannot be forced on them by interpreting cenvat credit rules as suggested by the Department. 8.2. The relevant portion of Rule 3 of the Cenvat Credit Rules as follows: "RULE 3.CENVAT credit. (1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of- -- -- -- -- -- (i) any input or capital goods received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o take recourse to the provisions of rule 3 of Cenvat Credit Rules and avail credit as well. This is will lead to availing double benefits. A benefit of lower rate of duty on condition that the credit was not taken and also the benefit of cenvat under Rule 3. The provisions of rule 3 (7) aims at denying such double benefits. When credit is to be denied it has to be credit on 'any inputs' which in the context would mean credit on 'all inputs'. 8.5. The notification 6/2002 bars credit of duty paid only on chassis. The interpretation of explanation to Rule 3(7) has the effect of denying the credit on all inputs. If there was no bar on taking credit on chassis as a condition in the notification, then the Rule 3(7) would not be applicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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