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2024 Supreme(Online)(CESTAT) 656
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
RAMESH NAIR, RAJU, JJ
Macleods Pharmaceuticals Ltd – Appellant
Versus
C.C.E. & S.T.-Daman – Respondent
EXCISE Appeal No. 10840 of 2015 - DB
For the Appellants/Petitioners: Ms Mansi Patil
For the Respondents: Shri Tara Praksah
The choice of utilizing either of two beneficial exemptions is up to the assessee, and demanding payment under CENVAT rules for goods not subject to duty is unsustainable.
Headnote:(A) Central Excise Act, 1944 - CENVAT Credit Rules, 2004 - Notification No. 04/2006-CE and 108/1995-CE - Demand of amount under Rule 6(i) of Cenvat Credit Rules challenged - Appellant not mandated to avail Notification No. 04/2006-CE as it is conditional - Tribunal affirmed that two beneficial exemptions are available, and the choice lies with the assessee (Paras 4.2, 4.5, and 4.10).
(B) Legal Principle - Exempted goods may be exported under bond without attracting additional duty as prescribed under Rule 6(3) relating to dutiable and exempted goods (Paras 4.4 and 4.6).
Facts of the case:
The appellant argued that the department's interpretation forces them to comply with an absolute exemption under Notification No. 04/2006-CE, which they contended is conditional. The Tribunal previously held that such a notification is not absolute.
Findings of Court:
The demand under Rule 6(3) Cenvat Credit Rules, 2004 is unsustainable on several grounds - lack of suppression of facts, availability of beneficial provisions, and adherence to export requirements.
Issues: Whether the appellant is required to pay 5% duty on goods exempted under Notification No. 108/1995-CE; and if the demand is sustainable under Rule 6 of Cenvat Credit Rules, 2004.
Ratio Decidendi: The court held that exemptions under Rule 6(6)(v) are applicable; thus, imposing additional duty under Rule 6(3) is unjustifiable.
Result: Appeal allowed, and the demand is set aside.
| Table of Content |
|---|
| 1. the case concerns dual notifications and their applicability. (Para 1) |
| 2. appellant argues exemption notification is not mandatory. (Para 2) |
| 3. revenue reiterates findings of the impugned order. (Para 3) |
| 4. court examines applicability of notifications and past judgments. (Para 4) |
| 5. court concludes that the demand is not sustainable. (Para 5) |
RAMESH NAIR
The issue involved in the present case is that two Notifications No. 04/2006-CE dated 01.03.2006 and simultaneously the Notification No. 108/1995-CE dated 28.08.1995 are available to the appellant and the goods supplied in terms of Notification No. 108/1995-CE, whether is it mandatory for appellant to avail the notification No. 04/2006-CE. As per contention of the department that the said exemption is absolute and the appellant had no option to pay duty or avail a conditional notification. In this position, whether the appellant is liable to pay 5%/6% of the value of the goods cleared under Notification No. 108/1995-CE under Rule 6(i) of Cenvat Credit Rules , 2004.
2. Ms. Mansi Patil, Learned Counsel appearing for the appellant at the outset submits that the whole case of the department is that when Notification No. 04/2006-CE was available to the appellant, which is the absolute notification. The appellant was supposed to clear the goods under said notification hence, there is a liability of 5% amount of value of exempted goods under such notification.
2.1 She submits that this Tribunal in the appellants own case taken a clear view that the Notification No. 04/2006-CE (Sr. No 54 and 59) is conditional one. Therefore, there is no compulsion on the appellant to avail such notification. Accordingly, on the basis of exemption Notification No. 04/2006-CE, the department cannot insist for payment of 5% under Rule 6(i) of Cenvat Credit Rules , 2004. She also placed reliance on the following judgments:
CESTAT Order No. FO/11450-11451/2023 dated 07.07.2023- Macleods Pharmaceuticals Ltd. (Period: April, 2010 to March 2011)
Sangji Industries – 2008-TIOL-844-CESTAT-AHM Share Medical Care -2007 (209) ELT 321 (SC)
Indian Petro Chemicals - 1997 (92) ELT 13 (SC)
H.C.L. Limited - 2001 (130) ELT 405 (SC)
3. Shri Tara Praksah, Learned Deputy Commissioner (AR) appearing on behalf of the revenue reiterates the finding of the impugned order.
4. We have carefully considered the submission made by both the sides and perused the records. We find that the only basis of the department demanding 5% of the value of the goods, which were cleared under Notification No. 108/1995-CE, that the said goods were supposed to be cleared under notification 04/2006-CE. Therefore, the appellant was supposed to pay 5% in terms of Rule 6 (i) of Cenvat Credit Rules , 2004. Now the mute question to be answered is, whether the Notification No. 04/2006- CE is absolute or conditional and consequently whether the appellant was mandatorily required to avail such notification.
4.1 We find that the issue that whether the exemption notification No. 04/2006-CE (Sr. No. 54 and 59) are conditional or otherwise, It was held that the said notification is conditional one in the appellant’s own case, for which the order was passed by this Tribunal vide final order No. 11450-11451/2023 dated 07.07.2023. The said judgment is reproduced below:
“4. We have carefully considered the submission made by both the sides and perused the records. The issue to be addressed by us in the present appeal is that whether the appellant is liable to pay 5% amount of the value of the goods exported partly under claim for rebate and partly under Bond/ LUT in terms of Rule 6(3) of Cenvat Credit Rules , 2004 for the reason that the appellant’s export goods are exempted under Notification No. 4/2006 dated 01.03.2006
4.1 The entire case was made out by the revenue is that since the goods exported are exempted under Notification No. 4/2006-CE it is mandatory for the appellant to avail the exemption and either not to pay the duty nor clear t
