Order date – 05 September 2022

Facts – 

• The appellant, M/s SOLARIS CHEMTECH INDUSTRIES LIMITED, engaged in the manufacture of excisable goods available under Chapter 28 and 29 of the Central Excise Tariff Act, 1995. The appellant were located in Kutch and were availing of benefit of Notification No. 39/2001-CE dated 31.07.2001. The exemption mentioned in the aforesaid notification was provided by way of refund of duty paid on the goods cleared through PLA(other than that paid using Cenvat).
• The appellant was filing re-credit claims on a monthly basis and the same were allowed for the period April, 2008 to February, 2010.The appellants' claim filed for the month of April, 2008 to March, 2009 were rejected vide order No. 482-504/2009-10 dated 12.03.2010 by the Deputy Commissioner.
• It was held that the appellant had violated the condition given in para 2A of Notification No. 39/2001-CE which mandates that the manufacturer has to first utilize whole amount of Cenvat Credit available to him on the last day of the month under consideration for payment of duty of goods cleared during such month and pays only the balance amount in cash.
• In the instant case, since no amount of Cenvat Credit was availed, it was held that the appellant has not utilized the Cenvat Credit available to him for payment of duty first and since the appellant has paid the entire amount of duty under PLA the appellant has violated the condition prescribed under in para 2A of Notification No. 39/2001-CE dated 31.07.2001.
• The order of the Deputy Commissioner was passed without issuing any Show Cause Notice and without granting any hearing to the appellant. 
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the Cenvat Credit which could have been taken by a manufacturer, but not taken voluntarily, can be called credit available to him?

Order – 

• The Tribunal observed that the reason for introducing the restriction of full utilization of credit available is that the assessee does not misuse the exemption by taking credit and not using the same. 
• Thereby, accumulating the credit and using it on a latter date when they get out of the notification no.39/2001-CE. It was seen that if the appellant does not take any credit then no such mal-practice can happen and no credit can be accumulated. 
• Moreover, it also implies that the credit “available” would mean the Cenvat credit taken and available in the credit of Cenvat account and not the credit that the appellant could have possibly taken but did not avail. 
• Moreover, in the instant case, since by not taking the credit the quantum of refund admissible to the appellant remains as same as it would have had the appellant taken the credit and utilized the same. Therefore the Tribunal found that rejection of rebate claim on this ground is without any basis.
• Appeal allowed.