Dear Freinds,
This is regarding optional exemption under noti-01/2011-CE.
Please suggest on facts given below:-
1) Assessee is a hard coke manufacturer. Notification no. 02/2011-CE as well 01/2011-CE both are applicable on him.
2) Whereas noti. 02/2011 CE allows to take cenvat credit on input but require to pay 5% duty on the output. On the other hand noti. 01/2011 CE do not allow cenvat credit but charge output at lower rate of 1% only.
3) Noti 02/2011 CE became almost an industry standard for hard coke manufacturer. Almost every manufacturer (including the Assessee) pays 5% duty on output and take credit of cenvat. (Considering the heavy cenvat available on input & capital goods)
4) Excise return for those following noti. 02/2011 is monthly ER-1 while for those following noti. 01/2011 is ER 8.
5) Assessee (Company) was following noti. 02/2011 filled ER 1 till augest 2011. However filled nil ER 8 in September 2011 by mistake. As a rectification measure, it filled ER-1 also for September 2011, and intimated the excise authority about wrongly filling of ER-8.
The excise department is now interpreting it as that since it’s the assessee who has filled ER 8 hence they would take interpret it as assessee following noti 01/2011. Hence no cenvat credit would be allowed to assessee and credit lying in the books will be rejected now.
Assessee has the contention that assessee used to file only ER 1 till augest 2011 and hence interpretation should be that assessee is following noti 02/2011. Filling of ER 8 was just a bonafide mistake for which it has even informed the department. Hence no cenvat credit should be disallowed taking filled ER 8 as null.
Kindly suggest whether assessee contention is right and can be established??
Thanking You
CA Madhusudan Kr. Poddar, ACA, ISA (ICAI)
CAclubindia
