JUDGMENT :

A.K. Sikri, J.

1. The Respondent (hereinafter referred to as the "Assessee") had two units, one is for the manufacture of sugar and molasses and the other for distilling of denatured spirit, which is dutiable product and rectified spirit, which is non-dutiable product. The Assessee had applied for grant of single licence for both the units as the distilling unit was using molasses manufactured by sugar unit, as inputs, for the manufacture of dutiable and non-dutiable products i.e. denatured spirit and rectified spirit respectively and also because of the reason both these units were located in the same premises. This request of the Assessee was allowed and the Assessee was granted the single licence.

2. In the present case, we are concerned with the CENVAT Credit which was earned by the Assessee in terms of CENVAT Credit Rules, 2001 which were in existence. These Rules were superseded by new Rules, namely, CENVAT Credit Rules, 2002 (hereinafter referred to as the "Rules, 2002").

3. It would be relevant to point out here that under the CENVAT Credit Rules, 2001, the Assessee was also paying duty @ 8% of the value of the exempted goods cleared by it in lieu of the CENVAT Credit availed by it on the inputs utilized in the manufacture of its goods. The duty was obviously paid on the dutiable products, namely, denatured spirit. The issue pertains to the utilization of the CENVAT Credit which was already accumulated in favour of the Assessee at the time when the Rules, 2002 were brought into force. The utilization of the major portion of the credit was denied to the Assessee by the Adjudicating Authority invoking the provisions of Rule 6 of the Rules, 2002. The Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), however, reversed the aforesaid decision of the Commissioner holding that Rule 6 has to be given effect to prospectively and it would not come in the way of the CENVAT Credit already earned and accumulated by the Assessee. Since interpretation of Rule 9 read with Rule 6 as well as Rule 3(3) of the Rules, 2002, is involved, we re-produce the relevant Rules 3(3), 6 and 9 as under:

Rule 3. CENVAT credit.-

(1) xxx

(2) xxx

(3) 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 Centrall Excise Rules, 2002.

Provided that while paying duty, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month for payment of duty relating to the month.

Provided further that the CENVAT credit of the duty paid on the inputs used in the manufacture of final products cleared after availing of the exemption under the notification numbers 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508 (E) dated the 8th July, 1999] and 33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509 (E) dated the 8th July, 1999], shall be utilized only for payment of duty on final products, cleared after availing of the exemption under the said notification numbers 32/99-Central Excise, dated the 8th July, 1999 and 32/99-Central Excise, dated the 8th July, 1999.]

Provided also that the CENVAT credit of the duty paid on the inputs used in the manufacture of final products cleared after availing of the exemption under the notifications No. 39/2001-Central Excise, dated the 31st July, 2001 [G.S.R. 565 (E), dated the 31st July, 2001], No. 56/2002-Central Excise dated the 14th November, 2002, [G.S.R. 764 (E) dated the 14th November, 2002], No. 57/2002-Central Excise, dated the 14th November, 2002 [G.S.R. 765 (E), dated the 14th November, 2002] and No. 56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513(E), dated the 25th June, 2003] shall respe