2026-VIL-1309-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Denial of concessional excise duty rate under Notification No. 12/2012-CE due to availment of Cenvat Credit – Appellant-manufacturer of Fertilizer availed concessional duty of one percent on NPK Mixtures subject to condition no. 25 requiring that no Cenvat Credit should be taken on duty or service tax paid on inputs - Appellant reflected Cenvat Credit in ST-3 returns relating to service tax and ER-1 returns for June 2017 - Whether availment of Cenvat Credit violates Condition No. 25 and whether non-utilization or subsequent reversal or lapse during GST transition cures the violation - HELD - Condition No. 25 of Notification clearly provides that concessional duty is available only where no credit has been taken on excise duty or service tax on inputs and the language used is clear and unambiguous. The phrase no credit has been taken focuses on act of availment itself and not merely on utilization - There is marked distinction between taking credit and utilizing credit as law recognizes both as separate events. Once credit is entered and availed under statutory records it constitutes availment of Cenvat Credit even if credit remained unutilized as notification condition specifically says credit should not be taken and not that credit should not be utilized. Mere non-utilization does not erase fact of availment – The contention that credit shown in June 2017 represented transitional closing stock credit while shifting to GST is untenable as issue is not whether credit later migrated to GST or lapsed but whether during disputed excise period appellant availed credit while simultaneously availing concessional excise duty and subsequent transition to GST cannot retrospectively cure breach of notification condition. Exemption notifications must be construed strictly and burden to establish eligibility lies entirely upon claimant. Department correctly invoked extended period under proviso to Section 11A as appellant continued to avail concessional duty despite taking credit prohibited under notification - The demand of differential duty along with interest and penalty is sustained – The appeal is dismissed
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