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TMI Blog2024 (9) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Rules, 2004. As regard the heavy reliance placed by the revenue in the case of M/s. Unicorn Industries vs. UOI [ 2012 (5) TMI 621 - SIKKIM HIGH COURT] , in that case the issue was different that whether the NCCD is an excise duty or surcharge. Even though as per the said judgment the NCCD is not an excise duty but a surcharge, rule 3 permits the utilization of basic excise duty for payment of NCCD. Therefore, judgment in the case of M/s. Unicorn Industries vs. UOI is not relevant on the issue and facts of the present case. The respondent is correct in utilizing the credit of basic excise duty for payment of NCCD. Therefore, the impugned orders are legal and correct and the same deserve to be sustained. The impugned order is upheld - appeal of Revenue dismissed. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. C L MAHAR Shri Sanjay Kumar Superintendent ( AR ) for the Appellant Shri Hardik Modh , Advocate for the Respondent ORDER RAMESH NAIR The issue involved in these appeals filed by the revenue is whether the respondent can utilize the Cenvat credit of basic excise duty for payment of National Calamity Contingent Duty ( NCCD ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Duty. 3. Shri S. J. Vyas Learned Counsel appearing on behalf of the Respondent at the outset submits that the issue involved in the present case that the utilization of Cenvat Credit for payment of NCCD has been settled in various judgments including the judgments in the appellants own case. He relied upon the following judgments. Sanathan textile 2018 12 TMI 356 TRI AHD Prag Bosmi Synthetics- 2013 11 TMI 487 HC Gauhati Bajaj Auto Ltd- 2019 3 TMI 1427 SC 4. We heard both the sides and perused the records. We find that the appeal of the revenue is only on the reliance of Hon ble Sikkim high court judgment in the case of Unicorn Industries vs. Union of India (supra). Whereas we find that on the absolutely identical issue that whether payment of National Calamity Contingent Duty can be made by utilizing the Cenvat Credit of Basic Excise Duty has been dealt with by the Hon ble Gauhati High Court in the case Union of India Vs. Kamakhya Cosmetics Pharmaceutical Pvt. Ltd., 2015 (323) E.L.T. 33 (Gau.) (Ex.-G) wherein it was held that payment of education cess can be made by utilizing Cenvat Credit of Basic Excise Duty. This judgment was passed relying the same High Court Judgment in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed to take credit (hereinafter referred to as the CENVAT credit) of (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act; (ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act; (iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act,1978 ( 40 of 1978); (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ( 58 of 1957); (v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); (vi) the Education Cess on excisable goods leviable under section 91 read with section 93 of the Finance (No.2) Act, 2004 (23 of 2004); (via) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007); (vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v) (vi) and (via); (viia) the additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in sub-rule (1), the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in process or inputs contained in the final products lying in stock on the date on which any goods manufactured by the said manufacturer or producer cease to be exempted goods or any goods become excisable. (3) Notwithstanding anything contained in sub-rule (1), in relation to a service which ceases to be an exempted service, the provider of the output service shall be allowed to take CENVAT credit of the duty paid on the inputs received on and after the 10th day of September, 2004 and lying in stock on the date on which any service ceases to be an exempted service and used for providing such service. (4) The CENVAT credit may be utilized for payment of a) any duty of excise on any final product; or b) an amount equal to CENVAT credit taken on inputs if such inputs are removed as such or after being partially processed; or c) an amount equal to the CENVAT credit taken on capital goods if such capital goods are removed as such; or d) an amount under sub rule (2) of rule 16 of Central Excise Rules, 2002; or e) service tax on any outp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable under Section 136 of Finance Act, 2001. As per this provision, credit of NCCD is a Cenvat credit. As regard utilization in terms of Rule 3(4)(a), the Cenvat credit is allowed to be utilized for payment of any duty of excise on any final product. Rule 3(7)(b) provides some restrictions, according to which the cevnat credit in respect of NCCD can be utilized only for payment of NCCD that means, Cenvat credit of NCCD is not allowed to be utilized for payment of basic excise duty. However, similar restriction is not provided for utilization of basic excise duty for payment of NCCD. 5. Therefore, in view of the clear statutory provisions, as discussed above, there is no bar in utilization of basic excise duty for payment of NCCD. This issue has been considered by the Hon'ble Gauhati High Court in the case of CCE, Dibrugarh vs. Prag Bosimi Synthetics Limited 2013 (295) ELT 682 (Gau.) wherein the Hon'ble High Court on an identical issue, passed the following judgment:- 8. The second part of the substantial question of law would now arise, namely, whether CENVAT credit can be utilized towards payment of NCC duty under the CENVAT Credit Rules. 9. In this regard it is neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit may be utilized, inter alia, for payment of any duty of excise on any final product. To this extent also there is no dispute between the parties. However, what is of importance is the second proviso to Rule 3(4) of the CENVAT Credit Rules. This provides that the CENVAT credit of duty paid on inputs used in the manufacture of a final product cleared after availing of the exemption under Notification No. 32/99-C.E. shall be utilized only for payment of duty on the final product in respect of which exemption under the said notification is availed of. It is clear from this that CENVAT credit of duty paid on inputs shall be utilized only for payment of duty on the final product for which exemption is availed. 12. Rule 3(7) is equally important and this reads as follows : (7) Notwithstanding anything contained in sub-rule (1) and sub-rule (4), - (a) (b) CENVAT credit in respect of, - (i) . (ii) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); (iii) (iv) (v) . (vi) shall be utilized only towards payment of . the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001, respectively, on any final produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly a duty of excise, Rule 3(4) provides that CENVAT credit may be utilized for payment of any duty of excise on any final product. Therefore, CENVAT credit of NCC duty may also be utilized for payment of any duty of excise on any final product in terms of Rule 3(4) subject to Rule 3(7). 17. Rule 3(7) limits the utilization of CENVAT credit in respect of NCC duty as also other duties mentioned in Rule 3(7)(b). It provides that CENVAT credit in respect of NCC duty and other duties shall be utilized towards payment of duty of excise leviable under various statutes respectively. The use of the word respectively in this regard is important inasmuch as it confines the utilization of CENVAT credit obtained to a particular statute and for utilization for payment of duty under that statute only. The converse, however, does not follow. That is to say that merely because CENVAT credit in respect of NCC duty can be utilized only for payment of NCC duty, it does not follow that any other credit of duty cannot be utilized for payment of NCC duty. 18. This being the position, in our opinion the Commissioner of Central Excise at Dibrugarh was in error in coming to the conclusion that CENVA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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