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2015 (2) TMI 650 - CESTAT NEW DELHILevy of interest on wrong utilisation of Additional Excise duty(AED)- Held that:-The Appellant immediately after amendment to Rule 3 (6) of Cenvat Credit Rules, 2002 had utilised the AED (GSI) credit of ₹ 8,71,12,812/- pertaining to the period prior to 01/04/2000 for payment of Basic Excise Duty and Special Excise Duty on tyres. However, Section 88 of the Finance Act, 2004 retrospectively amended Rule 3 (6) of the Cenvat Credit Rules, 2002 to provide that the AED (GSI) credit accrued prior to 01/04/2000 could not be used for payment of Basic Excise Duty and Special Excise Duty and sub-Section (4) of this section provided for recovery of the pre 01/4/2000 AED (GSI) credit wrongly utilised for payment of BED and SED. Thus in terms of Section 88 (4) of the Finance Act, 2004 in the cases of utilisation of AED (GSI) credit pertaining to the period prior to 01/04/2000 for payment of Basic Excise Duty and Special Excise Duty, its recovery could be made in terms Rule 12 of Cenvat Credit Rules, 2002 readwith Section 11A and interest on the same would be leviable under Section 11AB and for this purpose, the relevant date would be 10/09/04. This relevant date is obviously for the purpose of counting limitation period for the issue of show cause notice for recovery under Section 11A (1) not for counting the period for levy of interest. The interest under Rule 12 of Cenvat Credit Rules, 2002 would be leviable under Section 11AB and would start from 1st day of the month succeeding the month in which the credit was wrongly utilised for payment of BED and SED. The provisions of Section 88 of Finance Act, 2004 were amended by adding sub-Section (5) and sub-Section (6) by Section 124 of the Finance Act, 2005. Sub-Section (5) of the Finance Act, 2005 starts with the words notwithstanding anything contained in sub-Section (4) of Section 88 and prescribes a procedure for payment of the wrongly utilised AED (GSI) credit pertaining to period prior to 01/04/2000 in 36 instalments starting from July, 2005. Clause (V) of sub-Section (5) provides that the amount of interest on the amount of credit utilised for paying Cenvat duty shall be @ 13% per annum for the period beginning on and from the day when each time the amount of credit was so utilised and ending on the 10th day of September, 2004. Though, sub-Section (5) added to Section 88 of the Finance Act, 2004 by Section 124 of the Finance Act, 2005 is a non-obstinate provision and would override the provisions of sub-Section (4) of Section 88 of the Finance Act, 2004, this would be applicable only in those cases, where the wrongly utilised AED (GSI) credit had not been paid as on the date of the enactment of Finance Act, 2005, as it is not a retrospective provision and does not replace the sub-Section (4) of Section 88 with retrospective effect. In this case, the appellant had paid the entire amount of wrongly utilised AED (GSI) in December 2004 and, therefore, in our view, the provisions of Section 124 of the Finance Act, 2005 would not be applicable and as such their interest liability would be governed by sub-Section (4) of Section 88 of the Finance Act, 2004. Since, in this case the wrong utilisation of the AED (GSI) credit pertaining to period prior to 01/04/2000 has taken place in 2003 immediately after amendment to Rule 3 (6) of the Cenvat Credit Rules, 2002, the interest liability under Section 11AB would start from 1st day of the month succeeding the month in which the wrong utilisation had taken place till the payment of wrongly utilised credit. - Decided against the assessee.
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