Per Dr. Chittaranjan Satapathy : Heard both sides. After hearing both sides on 27.3.07 and keeping in view the decision of the Bangalore Bench in the case of Commr. of Central Excise, Guntur Vs. Virat Crane Industries Ltd. - 2007 (208) ELT 262 (Tri.-Bang.) and taking into account an offer of the ld. Advocate, we had directed the appellants to execute the Bank Guarantee of Rs. 25,00,000/- to partly secure the duty demand in this case. The present miscellaneous application has been filed for modification of the stay order on the ground that the offer to execute the Bank Guarantee was made by the ld. Advocate on the mistaken impression that the aforesaid decision of the Bangalore Bench is applicable to the facts of this case.

2. After hearing both sides for some time, we find that the issue involved in this case is whether the credit of basic duty earned by the appellants can be utilized for payment of NCCD on the final product. Hence, we are prima-facie of the view that the decision of the Bangalore Bench cited above is not relevant to resolve the issue in hand. Accordingly, we allow the miscellaneous application for modification and waive the requirement of executing a Bank Guarantee and proceed to decide the appeal itself with the consent of both the sides.

3. The appellants are working under Notification No. 32/99 applicable to the goods manufactured in the North Eastern Region under which they are allowed to take refund of duty paid in cash through PLA. Ld. Consultant clarifies that they have not paid any NCCD by cash, nor they are seeking any refund of the same. As such, the appeal does not involve interpretation of Notification No. 32/99.

4. The ld. Consultant further clarifies that they are partly paying the NCCD on the final product by utilizing the credit of NCCD paid on the inputs. The remaining part of the NCCD has been paid by them by utilizing the credit of basic excise duty. Such utilization of the basic duty credit has been disallowed by the adjudicating Commissioner resulting in this appeal.

5. We find that under Sub-Rule 3 (4) of the Cenvat Credit Rules, 2004, Cenvat credit can be utilized for payment of any duty of excise on any final product. As pointed out by the ld. Consultant, the adjudicating Commissioner herself has come to a finding in page 3 of her order that NCCD is a duty of excise. As such, the credit of basic duty of excise has to be allowed for payment of NCCD in view of aforesaid Rule 3 (4) of the Cenvat Credit Rules, 2004.

6. There is a restriction under Rule 3 (7) of the Cenvat Credit Rules, 2004, which applies to the credit of various duties, such as additional duties on textiles and textiles articles, NCCD, Educational Cess, etc. In terms of this restriction, which overrides the provisions of Rule 3 (4), the credit of the named of duties can only be utilized for payment of the said duties alone. As a result, the credit of NCCD can be utilized for only paying of NCCD and not other kind of duties. In the present case, there is no dispute in this regard, since the appellants have utilized the credit of NCCD for paying NCCD only. By no stretch of imagination, this restriction can be extended to credit of duties not specifically listed under Rule 3 (7). The credit of basic excise duty is one such duty credit, which is not subject to restriction under the said Rule 3 (7). Therefore, in the absence of any restriction and as provided under Rule 3 (4) of the Cenvat Credit Rules, 2004, the credit of basic excise duty can be utilized for payment of any duty of excise and since the Commissioner herself has held that NCCD is a duty of excise, there can be no objection to the appellants utilizing the credit of basic duty for payment of NCCD.

7. In view of our findings as above, we set aside the impugned order and allow the appeal with consequential benefit to the appellants.