Customs, Excise and Gold Tribunal - Mumbai
Sagar Twisters vs Cce on 6 May, 2005
Equivalent citations: 2005(188)ELT497(TRI-MUMBAI)
ORDER Archana Wadhwa, Member (J)
1. Duty of approximately Rs.19.90 lakhs has been confirmed against the appellants along with imposition of personal penalty of identical amount under the provisions of Section 11AC of the Act, by denying them the benefit of notification no. 4/97 CE, dated 01.03.1997 as amended.
2. Serial no. 116A of the said notification extends concessional rate of duty in respect of various fabrics mentioned under column 3 of the notification subject to fulfillment of conditions of the notification. Condition 15C is to the effect that no credit under rule 57A and 57Q of the Central Excise Rules, 1944 has been availed. The appellants on or around 09/08/97 took credit of Rs.21,000/- in terms of the provisions of rule 57Q, while declaring its intention to avail the benefit of notification no. 04/97. However, the said credit was subsequently reversed by them in September 1998, without utilizing the same. The benefit was denied on the ground that once the credit was taken, the condition of the notification was violated, thus, disentitling them to the benefit of the notification. The Revenue's reasoning is that the condition in the notification is about availing the modvat credit and is not concerned with the utilization of the same. As such, as soon as the appellants made the credit entries in their modvat accounts they became disentitled to the benefit of the notification.
3. The appellant's contention on the other hand is that they initially availed the credit and the same was subsequently reversed by them, which had the effect as if no credit was availed. For the above purposes, reference was made to the Allahabad High Court's decision in the case of Hello Minerals Water (P) Ltd. v. Union of India, reported in 2004(174)ELT 422(All.) laying down that reversal of modvat credit amounted to non-taking of credit on inputs and the benefit of the exemption notification no. 15/94 CE was to be granted, when reversal of credit was even done at the Tribunal's stage. It was also observed that reversal of credit can be made even subsequent to the clearance of final product and the same would satisfy the condition of the notification which extended the exemption subject to non-availment of modvat credit on inputs.
4. We find the above decision is fully applicable to the facts of the instant case. In the present matter, the credit remained unutilized on the records only. The Hon'ble Madras High Court in the case of R.A. Mani v. Palanimuthu Pillai, reported in AIR 1967 Madras 16 (V 54 C 7) has observed in para 6 that the word "avail" is stated to mean that "to take advantage or utilize". A person can be said to have availed himself of something only if he had taken advantage or profited by that thing or utlilised it to his benefit. Expression used in the notification in question is that the credit has not been availed of. Inasmuch as the appellants had not utilized the credit, it cannot be said that they had availed the same.
5. We may here observe that the entire object of the condition annexed with the notification is to ensure that an assesse does not get the double benefit of the duty exemption as well as the modvat credit of duty paid on the inputs used in the final products, which are ultimately cleared without payment of duty. In view of the foregoing, we set aside the impugned order and allow the appeal with consequential relief to the appellants.