RAYMOND LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) IN this order, we are dealing with four appeals. Three appeals are filed by the appellant M/s. Raymond Ltd. The first appeal (Appeal No. E/3090/2004) pertains to Raymond Ltd. (textile division), Thane. The second appeal (Appeal No. E/1963/2004) pertains to Raymond Ltd., Nashik. The third appeal (Appeal No. E/3002/2004) also pertains to Raymond Ltd., Nashik. The fourth appeal is filled by Shri R.K. Shriyan, DGM, Raymond Ltd., Nashik. The first two appeals were decided by this Tribunal wherein part of the appeal was allowed and part was remanded to the Commissioner for re -adjudication. The Revenue filed an appeal against the said order of the Tribunal before the hon'ble Bombay High Court. The hon'ble Bombay High Court, in turn, has remanded the matter to this the Tribunal for readjudication. The common issue is involved in the first three appeals and fourth appeal is relating to penalty. The issue in brief is that the appellant had accumulated credit of additional duties of excise (textiles and textile articles) (hereinafter referred to as "AED (T and TA)" as on April 1, 2000. In addition, certain credit of the said duty was availed of during April 1, 2000 to June 30, 2001. This credit could not be utilised during the period of availment as the goods chargeable to AED (T and TA) were not cleared and hence duty liability was far less than the accumulated credit. The credit was, however, utilised during January, 2003 to May, 2003 for payment of additional duties of excise (goods of special importance) (hereinafter referred to as "AED (GSI)" and as also basic excise duty leviable under the Central Excise Act, 1944. Thus the basic issue involved in the appeals is whether accumulated credit of AED (T and TA) can be cross -utilised for payment of duty relating to AED (GSI) and for payment of basic excise duty during January, 2003 to May, 2003.

(2.) IN the earlier round of litigation in relation to Appeal No. E/1963/2004, this Tribunal vide Order No. A/459/WZB/2005/C -I/EB, dated May 10, 2005, based upon this Tribunal's judgment in the case of Reliance Industries Ltd. v. CCE reported in, [2002] 150 ELT 479 (Trib. -Mum) and Grasim Industries Ltd. v. CCE reported in, [2003] 54 RLT 288 (Trib. -Delhi), held that credit of the AED (T and TA) can be utilised for payment of AED (GSI). As far as the appellant's plea relating to utilisation of the AED (T and TA) for payment of basic excise duty is concerned, the matter was remanded to the Commissioner with certain directions. Similar order was passed in respect of Appeal Nos. E/3090/2004, vide Order Nos. A/13 to 15/2007/C -I (EB), dated December 11, 2006. The Revenue took the matter relating to allowing utilisation of credit of the AED (T and TA) for payment of duty under the AED (GSI). The hon'ble High Court of Bombay vide the order dated March 29, 2012 disposed of both the appeals as under:

(3.) THE learned authorised representative, on the other hand, opposed the contentions of the appellant. He argued that the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 and the Additional Duties of Excise (Goods of Special Importance) Act, 1957 operate in different fields and have different purposes. It would be seen from section 3(2) of the AED (T and TA) Act, 1978 that the proceeds of the AED (T and TA) shall not be distributed among the States and the proceeds go to the Union of India. In the case of the AED (GSI), section 4 of the AED (GSI) Act, 1957 very specifically provides that part of the net proceeds of additional duty collected during a financial year is required to be distributed among the States. The learned authorised representative further argued that in view of this position, cross -utilisation of Cenvat credit of the AED (T and TA) is not allowed since the inception of the Cenvat Credit Rules. He further argued that till April 1, 2000, this was specifically disallowed vide paragraph 2 of Notification No. 21/1999 -CE (N.T.), dated February 28, 1999. The learned authorised representative further argued that in the 2000, Rules relating to Cenvat credit on inputs and capital goods were redrafted and the redrafted Rules were brought into the Central Excise Rules vide Notification No. 11/2000 -CE (N.T.), dated March 1, 2000 as amended. He further argued that sub -rule (2) of rule 57AB specifically stated that credit in respect of the AED (T and TA), AED (GSI) and additional duty under section 3 of the Customs Tariff Act shall be utilised only towards payment of duty of excise leviable under the said AED (T and TA), Act or under the said AED (GSI) Act. In view of this position, even during this period, cross -utilisation of the AED (T and TA) was not permitted. Rule 57AG provided for the transitional provision which saved the accumulated credit and provided that the said credit can be utilised in accordance with these Rules (new Rules). The learned authorised representative further argued that in 2001 separate Cenvat Credit Rules were notified by the Government (which were hitherto part of the Central Excise Rules and rule 3(6)(b) specifically stated for utilisation of the AED (T and TA) for purpose of the AED (T and TA) and here again, the new transitional provision stated that the accumulated credit shall be allowed and utilised in accordance with these Rules. From the legislative history as also the purpose for which the AED (T and TA) is collected, it is abundantly clear that credit of the AED (T and TA) can be utilised only for the purpose of payment of the AED (T and TA). He further argued that under the circumstances, there cannot be any vested right to the appellant. The appellant has utilised the credit in 2003 and as per the Rules existing at that point of time, AED (T and TA) could have not been utilised for payment of any other duty. The learned authorised representative further argued that the decision in Reliance Industries, [2002] 150 ELT 479 (Trib. -Mum) was challenged by the Department. An application was made to the Tribunal to refer the point of law to the hon'ble Gujarat High Court, which was turned down. However, thereafter the Department filed a reference application to the hon'ble High Court of Gujarat and the hon'ble High Court of Gujarat directed the Tribunal to make a reference to the hon'ble High Court. The matter is pending thereafter. Similarly, in the case of Grasim Industries Ltd., [2003] 54 RLT 288 (Trib. -Delhi) the Department requested the Tribunal to make a reference to the hon'ble High Court of Madhya Pradesh at Indore. The Tribunal refused to make a reference. Thereafter the Department approached the hon'ble High Court and the hon'ble High Court, in turn, has directed the Tribunal to frame the question of law and refer to it. The matter is pending there. He further stated that these facts were brought to the notice of the hon'ble Bombay High Court in pursuance of the decision of this Tribunal relating to the first two appeals and after hearing the argument for some time, the matter has been remanded to this Tribunal. In view of this position, this Tribunal should decide the matter without getting influenced by the decision of the Tribunal in the case of Reliance Industries, [2002] 150 ELT 479 (Trib. -Mum) and Grasim Industries Ltd,, [2003] 54 RLT 288 (Trib. -Delhi) and do not represent the law correctly. Both the decisions are under cloud. The learned authorised representative further argued that keeping in view the legislative intent and purpose of collecting the AED (T and TA), it was an established practice of the whole of the industry not to utilise the AED (T and TA) for any other purpose. Even during the amended Rule, i.e., from April 1, 2000 to June 30, 2001, the AED (T and TA) was not being used for any other purpose, even by the present appellant. It was only consequent to the Tribunal's decision in the case of Reliance Industries, [2002] 150 ELT 479 (Trib. -Mum) that the appellant decided to use the accumulated credit for purpose other than payment of the AED (T and TA). The learned authorised representative further quoted this Tribunal's judgment in the case of K.G. Denim Ltd. v. CCE reported in : [2008] 222 ELT 464 (Trib. -Chennai), wherein the Tribunal has correctly interpreted the rule and had held that the AED (T and TA) cannot be used for any other purpose. Similar view has been taken by this Tribunal in the case of Laxmi Suitings v. CCE reported in, [2008] 232 ELT 864 (Trib. -Delhi). Similar view has been taken, though at the stay stage, by this Tribunal in the case of Arviva Industries (India) Ltd. v. CCE reported in, [2013] TIOL -225 -CESTAT -MUM. As far as the appellant's contention that they have acquired a vested right and they can utilise the accumulated credit as per the law prevalent in 2000 to 2001, even in year, 2003, the learned authorised representative quoted the hon'ble Supreme Court's judgment in the case of National Engineering Industries v. CCE reported in, [2005] 5 RC 616 :, [2005] 188 ELT 471 (SC). In the said case, the hon'ble Supreme Court has very categorically held that the law prevalent at the time has to be applied. In this case, refund was pertaining to the period when the doctrine of unjust enrichment was not brought into the statute book. However, when the refund was being granted, the principles of unjust enrichment was brought into the law and the hon'ble Supreme Court has categorically held that the refund claim has to be examined with reference to the new law. The learned authorised representative further stated that a review petition against the said judgment was also dismissed by the hon'ble Supreme Court. He stated that in view of this decision, even if it is presumed that during the period 2000 to 2001, the appellant was entitled to use (which itself is incorrect) the said credit for payment of the AED (GSI), the same cannot be made applicable in January to May, 2003 when the law specifically prohibited the same. In case of the appellant, majority of the accumulated credit was pertaining to the period before March, 2000 wherein the law specifically prohibited. Thus, both at the time of taking the credit as also at the time of utilisation, the prohibition existed. In view of the above position, the learned authorised representative stated that the appellant has no case and all the appeals should be dismissed. The learned authorised representative also submitted that in case of Reliance Industries Ltd,, [2002] 150 ELT 479 (Trib. -Mum), credit was availed of and utilised during April, 2000 to May, 2001, unlike the present case and is therefore distinguishable on this count.