9911796707
TMI Blog2008 (11) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007, by framing the following substantial question of law :- "Whether opting of the appellant under the Optional Compound Levy Scheme introduced under the Notification of 1st July, 2001 has got any relevance with regard to the accrued Modvat credit on the goods manufactured prior to 10-12-1998 under Notification No. 36/1998?" 3. The controversy arises in the manner, that on 16-12-1998 a notification was issued in the exercise of powers under Section 3A of the Central Excise Act, the copy whereof is produced as Schedule-A, and according to that the compound levy of duty was prescribed. However, it was stipulated that nothing contained in that notification shall apply to the goods manufactured or produced prior to 16-12-1998, and cleared on or after that date. It appears that in respect of the goods manufactured prior to 16-12-1998 the petitioner was not allowed to avail Modvat credit. Thereafter writ petition was filed before this Court, which came to be allowed vide judgment dt. 22-8-2001 [2002 (142) E.L.T. 42 (Raj.)], copy whereof has been produced as Annexure-A. A perusal of that judgment shows, that thereby four writ petitions were decided, including that of the petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand was confirmed, and other consequences were invoked. 6. This order was challenged before the Commissioner, who vide order dt. 16-7-2004 affirmed the said order. It was found, that the scheme of compounded levy, under which the assessee had opted to work, was an optional one, and having once opted for it, it was not open for him to utilize the Modvat credit available with them, for payment of duty, as it would tantamount to simultaneously enjoying the benefits of both the schemes, (i.e. Compound levy and advalorem scheme) which is not permissible as per law. It was also held, that the High Court had only allowed the appellants to "avail" of the credit, and not "utilize" the same, as correctly pointed out by the adjudicating authority, and that, the High Court had given the judgment under the impression, that the appellants were in a position to utilize the credit, since the scheme of compound levy had been withdrawn w.e.f. 1-3-2001. The fact that another optional scheme of compound levy was in place, with effect from 28-6-2001, and the appellants would be utilizing the credit under the new scheme, was neither placed before the Court, nor seems to be the intention behind the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of any credit of duty paid on inputs, or capital goods, under the CENVAT Credit Rules, 2001, and it is on the face of this, that the assessee had opted for the provisions of this notification. Exercise of this option was a conscious decision of the assessee, after taking into account all commercial exigencies, and plus minus aspects, and with eyes open, and therefore, once the option was exercised, the assessee cannot fall back upon the judgment of the Court dt. 22-8-2001, and thereby bring about a hybrid system, of entitlement to pay excise duty on the basis of the notification, and at the same time to claim Modvat credit, in the garb of the order dt. 22-8-2001. It is submitted, that once the appellant had exercised option, he could not avail the Modvat credit, and since he had still availed it, and therefore, action taken has rightly been taken against him, and has rightly upheld by the CESTAT. 10. We have considered the submissions. 11. Before proceeding further, we may gainfully quote sub-paras 5, 6 and 7 of Para-8 of the notification no. 32/2001, the most relevant provisions for the present purpose. They read as under :- "(5) The independent textile processor opting fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the exercise of option. Ought we know, that if the fact situation would have been brought to the notice of the Court, this Court, while passing the order dt. 22-8-2001, would have settled the equities in an appropriate manner. Thus by not bringing to the notice of the court the above factual situation, neither the petitioner can be made to loose anything, nor the Department can be allowed to gain out of it. This is one aspect of the matter. 15. The other aspect of the matter is, that a proper reading of the above sub-paras (5), (6) and (7) does show, that even after exercising the option, the consequence is, that the assessee, exercising option, is not eligible to avail of any credit of duty paid on inputs or capital goods under the CENVAT Credit Rules, 2001. This language is wide of course, and is attempted to be interpreted by the learned counsel for the Revenue, that the use of word "any credit of duty paid or inputs of capital goods" includes the credit already earned by the assessee, and he cannot be said to be eligible to avail the same. Then, a reading of sub-paras (6) (7) makes the thing further clear, inasmuch as by sub-para (6) it is provided, that the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
