TMI Blog2014 (11) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment - Held that:- At the relevant point of time, the assessee was not registered with the Department and in fact, it subsequently obtained registration from the Department and therefore, if at all the assessee is entitled to any credit it would accrue only subsequent to the date of the registration with the Department. Even though the assessee claimed exemption on the ground that they had subsequently registered with the Department, as regards the liability as found in the order of adjudication as well as in the order of the Tribunal, we do not find any justifiable ground to accept the plea of the assessee based on the exemption Notification alone that the registration being not a mandatory one, the assessee would be entitled to the benefit of Modvat credit. - Decided against the assessee. - Civil Miscellaneous Appeal No. 926 of 2006 - - - Dated:- 9-1-2014 - Chitra Venkataraman and T.S. Sivagnanam, JJ. Shri Xavier Felix, for the Appellant. Shri V. Panchanathan for M/s. Lakshmi Kumaran, for the Respondent. JUDGMENT This appeal by the Revenue is directed against the final order passed by the Customs, Excise and Service Tax Appellate Tribunal (The Tribunal) da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Appellate Authority, by order dated 14-6-2004 reduced the penalty to ₹ 2,35,000/-, upheld the order demanding interest under Section 11AB of the Act and thus rejected the appeal as regards the demand of duty, claim for Cenvat credit and interest on duty. Thus the appeal was partly allowed, as regards the penalty to the extent indicated. Aggrieved by such order, the respondent/assessee preferred appeal to the Tribunal, in which three questions were considered by the Tribunal viz. (i) Whether the penalty imposed on the respondent/assessee should be set aside in toto; (ii) Whether the demand of interest deserves to be set aside and (iii) Whether the respondent/assessee was entitled to Modvat credit on inputs used in the final products cleared during the period in dispute? The Tribunal pointed out that the respondent/assessee had classified their product under Chapter Heading 52.08 based on certain decisions of the Tribunal. However, there was contrary decisions rendered by other benches of the Tribunal and ultimately, the larger bench of the Tribunal upheld the classification initially adopted by the respondent/assessee. Though the respondent/assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, is with regard to penalty. 11. Admittedly, there was a dispute as regards the classification of the product. The respondent classified the product under chapter heading Nos. 52.08 and 54.06. This was not accepted by the Department, which resulted in the issuance of show cause notice. Though, initially the respondent/assessee contested the show cause notice, subsequently, accepted the Department s view and accordingly paid duty on the goods. Thus the said classification issue attained finality and the respondent/assessee would not be entitled to contest the demand of duty stating that the concession given by them is not binding on the respondent/assessee. 12. In such circumstances, the next question would be whether the levy of penalty was justified in accordance with Section 11AC of the Central Excise Act, 1944. The penalty in the instant case has been imposed under Rule 173Q of the erstwhile Central Excise Rules, 1944 and Rule 25 of the Central Excise (No. 2) Rules, 2001 enforceable under Section 38A of the Central Excise Act, 1944. Since Rule 173Q of the erstwhile Central Excise Rules, 1944 is in pari materia to Rule 25 of the Central Excise (No. 2) Rules, 2001, though p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d whether the reasons assigned by the Tribunal to delete the levy of interest was proper and justified. 14. Section 11AB of the Central Excise Act, 1944 deals with interest on delayed payment of duty, which reads as follows : (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the person shall liable to pay duty as determined under sub-section (2) of Section 11A shall in addition to the duty, be liable to pay interest at such rate not below ten per cent and not exceeding thirty per cent, per annum, as is for the time being fixed by the Board, from the first day of the month succeeding the month in which the duty ought to have been paid under this Act or the rules made thereunder or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2) of Section 11A, till the date of payment of such duty. (2) For the removal of doubts, it is hereby declared that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Authority while considering the aspect went into the factual issue and pointed out that the assessee had not obtained Central Excise Registration Certificate while manufacturing industrial fabrics and had not followed any Central Excise procedural formalities while clearing such industrial fabrics and this aspect was not disputed by the assessee. Therefore the First Appellate Authority held that the assessee had not fulfilled the several conditions stipulated statutorily such as duty paid nature of the inputs, use of the duty paid inputs in the manufacture of dutiable finished goods to substantiate their claim for Cenvat credit. After taking note of the decision in the case of Formica India Division (cited supra) , the First Appellate Authority pointed out that the assessee had not satisfactorily explained before the original authority or substantiated before the First Appellate Authority that they are entitled to the claim for Cenvat credit. This finding of fact recorded by the First Appellate Authority has not been set at naught by the Tribunal rather no reasons have been given by the Tribunal for permitting the credit to be availed by the assessee. 18. Admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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