MAFATLAL INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) THE relevant facts of the case, in brief, are that the appellants are engaged in the manufacture of Cotton Yarn, Non Cellulosic Spurn Yarn, Processed Man Made Fabrics, 100% Cotton Fabrics, and Mixed Cotton Fabrics classifiable under Chapter 52, 54, and 55 of Central Excise Tariff Act, 1985. They received duty paid Yarn under Basic Excise duty and Additional Excise Duty (Textile and Textile Articles) and availed CENVAT Credit. A show cause notice dt.18.05.2004 was issued by the Additional Commissioner, Central Excise & Customs, Daman, proposing to recover CENVAT Credit of Rs. 29,16,687.00 along with interest and penalties for the period June 2003 to February 2004 on the ground that the appellant utilized the AED(T&TA) CENVAT Credit for the payment of Basic Excise Duty and Additional Excise Duty (Sales Tax). It has been alleged that as per Rule 3(6)(b) of CENVAT Credit Rules, 2002, the appellant is not eligible to utilize the AED (T&TA) for payment of Basic Excise Duty. The Adjudicating authority disallowed CENVAT Credit of Rs. 29,16,687.00 along with interest and also imposed penalty of equal amount under Rule 13 of CENVAT Credit Rules, 2002 read with Section 11AC of Central Excise Act 1944. The Commissioner (Appeals) rejected the appeal filed by the appellant.

(2.) LD . Advocate on behalf of the appellant submits that both the authorities below failed to appreciate the Board's circular F. No. 345/2/2003 -TRU, dt.16.04.2003. He drew the attention of the Bench to the said circular and submits that the Board clarified that AED(T&TA) is in the nature of duty of Excise and CENVAT Credit can be utilized for payment of any duty of Excise, which would include the Basic Excise Duty. He submits that when the Board has accepted AED (T&TA) as duties of Excise, and therefore, the appellant is eligible to utilize credit on payment of Basic Excise duty. He also submit that the Tribunal in the case of CCE & C Vadodara Vs Modern Petrofils Ltd. : 2004 (175) ELT 497 (Tri -Mum), held that the credit of specified duties can be utilized for payment of any one of specified duties. He relied upon the decision of the Tribunal in the case of Prag Bosimi Synthetics Ltd. Vs CCE Dibrugarh, 2007 (216) ELT 254 (Tri -Kolkata).

(3.) LD . Advocate, in rejoinder, submits that the decision of the Tribunal in the case of Raymond Ltd. is per incuriam in so far as Board's circular was not considered. He submits that the Board has accepted AED (T&TA) as duty of Excise and therefore, CENVAT Credit can be utilized any duty of Excise.