CCE Vs. MALWA INDUSTRIES LTD.

JUDGEMENT

(1.) IN these two appeals, filed by the Revenue, the issue involved is whether Cenvat Credit can be used for payment of Additional Excise duty.

(2.) SHRI D.N. Choudhary, learned SDR, alongwith Shri Vikas Kumar, learned SDR, submitted that the respondents,. Malwa Industries Ltd., manufacture cotton yarn and cotton denim fabrics, which are chargeable to duty of excise under Section 3 of the Central Excise Act and Additional Duty of Excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957; that the respondents are availing the facility of Cenvat Credit; that the respondents had utilised Cenvat Credit for payment of Additional Excise duty, that the Cenvat Credit could be used only for payment of Basic Excise Duty and Special Excise Duty; that the Commissioner, under both the impugned orders, has held that the Cenvat Credit may be utilised for payment of any duty of excise, which is not correct; that Rule 57AB(1)(b) provides that Cenvat Credit can be used for payment of any duty of excise; that Rule 2(7) of Central Excise Rules, 1944 and Section 2A of the Central Excise Act defines duty of excise to mean the duty leviable under Section 3 of the Act, which in turn, defines the term to mean the duty leviable n terms of the first and second Schedules to the Central Excise Tariff Act; that thus, as per the statutory definition, the Additional Excise Duty is not included in the expression 'Duty of Excise" and, therefore, the utilisation of the Cenvat Credit for payment of Additional Excise Duty is without any authority. The learned SDR, further, mentioned that the reliance of the Commissioner on Board's F. No. 345/8/2000 TRU dated 14.12.2000 is of no help to the respondents as the same is not conclusive; that in response to a reference, the Board under letter dated 20,6.02, desired that the matter may be got examined further; that in the case of CCE, Chandigarh v. Gontermann Peipers (I) Ltd., (Final Order No. A/253 -254/2002 -NB(DB) dated 18.2.2002), it has been held by the Tribunal that credit of Basic Excise Duty cannot be utilised for payment of Additional Excise duty.

(3.) COUNTERING the arguments, Shri M. Chandersekharan, learned Sr. Advocate, submitted that Board's letter dated 14.12.2000 has specifically clarified that the credit in respect of Basic Excise Duty paid on any inputs or capital goods, can be utilised for payment of duty on the final product under the Additional Excise Duty (T&TA) Act as well as AED (GSI) Act; that this letter has so far not been withdrawn by the Board; that in Gontermann Peipers (I) Ltd. case (supra), the Tribunal has observed that these instructions were made for Cenvat and not meant for interpreting Sub -rule (2) of Rule 57 or Clause (2) of Notification No. 21/1999; that in the present matter, whatsoever, under consideration is Cenvat and, therefore, the decision in case of Gontermann Peipers (I) Ltd. (supra) is not applicable to the facts of the present matters. He also relied upon the Tribunal's decision in the case of Girdharilal Sugar and Allied Industries v. CCE, 2002 (148) ELT 406 (T), wherein it has been held that in absence of any restriction on the use of specified duty paid on capital goods, the Revenue cannot claim that the credit of the Basic Excise Duty paid on capital goods, cannot be utilised for payment of Additional Excise Duty. In reply, Shri D.N. Choudhary, learned SDR, relied upon the decision in the case of Commissioner of Income -tax v. Ghaswala, 2002 (1) SCC 633 (SC) wherein it has been held that the Supreme Court that "every clarificatory note or press release issued by the Board does not have the statutory force like the circulars issued by the Board under Section 119 of the Act. It is only those circulars issued by the Board under the provisions of Section 119 of the Act, will have a statutory force and will be binding on every Income -Tax authority".