THIRD MEMBER ON REFERENCE : SHRI P.G. CHACKO, MEMBER (J) PARLE PRODUCTS PVT. LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, RAJKOT

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of biscuits and corrugated boxes having factory in Kutch District , Gujarat and are availing the benefit of Notification No. 39/2001 -C.E., dated 31 -7 -2001. According to the scheme, the manufacturer is required to utilize whole of the Cenvat credit available on the last day of the month under consideration for payment of duty on goods cleared and pay the balance amount of duty in cash. The duty paid in cash is refundable and for this purpose, the Notification has two alternative procedures. The appellants have opted for self -credit procedure under clause 2A of the Notification which allows the assessee to take credit of duty paid in cash and submit a statement to the jurisdictional AC/DC containing details in the next month before 7th to the month under consideration and AC/DC shall determine the amount correctly refundable to the manufacturer and intimate the same to the manufacturer by 15th of the next month. In case, the credit taken by the manufacturer is in excess of the amount determined by the AC/DC, the manufacturer is required to reverse the credit within 5 days from the receipt of the said intimation. The self -credit taken in the PLA can be utilized for payment of duty in the subsequent months which would be treated as cash payment.

(2.) DURING months of May, 2005 , July, 2005 and September to December, 2005, the appellants had utilized Rs. 20,19,827/ - available in the Cenvat credit account for payment of service tax on GTA services. However, the appellants themselves noticed that such utilization of Cenvat credit for payment of service tax is in violation of the condition of Notification No. 39/2001 and , deposited the entire tax on GTA amounting to Rs. 21,63,090/ - towards service tax and Rs. 43,243/ - towards education cess for the period from May, 2005 to January 2006 on 4 -4 -2006 and intimated the department.

(3.) 6 show cause notices all dated 23 -8 -2006 covering the period May 2005 , December 2005 came to be issued by the Revenue holding that self -credit of Rs. 20,19,827/ - taken by the appellants during the period from May 2005 to December 2005 is irregular since Cenvat credit to that extent was not fully utilized for the payment of excise duty on the final product in terms of clause (1A) of the Notification. After completion of adjudication and appeal processes, which culminated in confirmation of demand of Rs. 20,19,827/ - with interest, the appellants have filed this appeal.