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5. The respondent by order dated 7.3.2005 relying upon the decision of the Hon'ble Apex Court in case of Collector of Central Excise Versus Parle Export (P) Ltd. reported in 1988 (38) ELT 741 (SC) confirmed the demand as per the show cause notice on the ground that the Notification is a part of statute and as course of law and the same cannot be optional. The appellant was therefore, liable to abide by the exemption notification and when it is decided by the legislature to exempt certain goods by notification, the NEUTRAL CITATION C/TAXAP/1090/2007 JUDGMENT DATED: 21/11/2024 undefined appellant could not have opted for payment of duty and thereafter get the credit of such duty.

NEUTRAL CITATION C/TAXAP/1090/2007 JUDGMENT DATED: 21/11/2024 undefined 11.1 Learned advocate Mr. Sharma referred to and relied upon the findings of the adjudicating authority as well as the Tribunal and submitted that the the Tribunal has rightly referred to and relied upon the decision of the Apex Court in case of Commissioner of Central Excise and Customs (A), Ahmedabad Vs. Narayan Polyplast(Supra) as well as the decision in case of Collector of Central Excise Versus Parle Export (P) Ltd. (Supra) to hold that the Notification must be read as a whole in the context of the other relevant provision and such Notification is a part of statute which cannot be said to be optional. It was therefore, submitted that even if the appellant had paid the duty but, the same cannot be claimed as Modvat/Cenvat credit. It was further submitted that as per the provision of Section 5A(1A) of the Act which has been inserted by the Finance Act, 2005, the same would have retrospective applicability as the said provision starts with words "for removal of doubts" and as such the main provision of granting exemption is subjected to the verification which has been brought on statute by insertion of Clause (1A) in Section 5A of the Central Excise Act, 1944. It was therefore submitted that no interference is required to be made in the impugned order of the Tribunal as no question of law much-less any substantial question of law would arise from the impugned order as the appellant could not have any option to forego the unconditional exemption to the final products by virtue of the Notification Nos.6/2002 and 6/2003 at the relevant time and pay duty at the tariff rate and claim for Modvat/Cenvat credit on inputs NEUTRAL CITATION C/TAXAP/1090/2007 JUDGMENT DATED: 21/11/2024 undefined used in the manufacture of final products as the amendment provided in Section 5 by clause (1A) to Section 5A of the Central Excise Act, 1944 is clarificatory in nature and therefore would apply retrospectively.

16. Thus, there was no revenue loss even if the appellant has paid the duty on the final products. However, if the appellant is denied the claim of Modvat/Cenvat credit, the appellant would be subjected to the duty even though the products are finally exempted which would be contrary to the Notification and which would according to the decision of the Hon'ble Apex Court in case of Collector of Central Excise Versus Parle Export (P) Ltd. (Supra) would be a law. Therefore, the appellant once having paid the duty is bound to get the Modvat/Cenvat credit but, for the insertion of Clause 1A by the Finance Act, 2005 which specifically declares that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods. Thus, after the insertion the appellant- assessee was prohibited from payment of excise duty on the exempted excisable goods and therefore, there is no question of getting any Modvat/Cenvat credit in view of such prohibition.