TMI Blog2017 (11) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... n these circumstances, the appellant's argument carries weight that while pursuing their Writ Petition before the Bombay High Court challenging the viries of the levy, recorded the receipt of inputs and availability of the amount of CENVAT credit of the duty paid on such inputs, in their books of accounts, so as to claim the same in the future, if the issue of viries decided in their favour. Thus, mere recording/taking such credit, in the present circumstances, cannot be equated to availing of credit for utilisation and be inferred that the appellant hadavailed the credit with an intention to utilize the same - appellant are required to pay interest for the period during which the credit was lying in their books of records - besides, during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said Rules read with Notification No. 42/2008-CE dated 01.07.2008.Alleging that even though the appellant had been debarred from taking cenvat credit in terms of Rule 15 of the said Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, but they have wrongly availed cenvat credit of ₹ 5,39,66,221/- during the period 01.07.2008 to 31.08.2009, and reversed subsequently on 31.08.2009,demand notice was issued to them on 28.9.2010 for recovery of the interest of ₹ 46,10,781/-on the said credit amount reversed on 31.08.2009 along with proposal for penalty under Rule 15A of CENVAT Credit Rules and Rule 17 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (S.C.). Further, he has submitted that since there is no provision under the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 in view of the ratio laid down in their Shree Bhagwati Steel Rolling Mills Vs CCE - 2015 (326) ELT 209 (SC), therefore, recovery of interest on the wrong credit availed, interest under Rule 14 of CENVAT Credit Rules, 2004 or Section 11AB of Central Excise Act, 1944 cannot be resorted to. The limited provision for recovery of interest has been prescribed at Rule 9 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 which relates to recovery of interest only in the event the manufacture fails to pay the amount of duty payable by du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder No.A-10685-10696/2017 dt. 31.3.2017. Also, since the provision of the CENVAT Credit Rules, 2004 is not applicable to their case, therefore, imposition of penalty under Rule 15 of CENVAT Credit Rules, 2004 is bad in law. It is his further contention that Rule 17 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 cannot be attracted in the present case as the appellant had not removed the innotified goods in contravention of any of the provisions of the said Rules. 5. Per contra, Ld. AR for the Revenue, on the other hand, submitted that the principle laid down in Bhagwati Steel Rolling Mills (supra)case is not applicable to the facts of the present case inasmuch as in the said case the levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is inapplicable. Referring to the judgment of Hon ble Supreme Court in Ind Swift Laboratories Ltd.'s case (supra) , the Ld. AR for the Revenue vehemently argued that Rule 14 of the CENVAT Credit Rules, 2004 specifically provides for recovery of interest when cenvat credit has been wrongly taken or utilized. This principle has been followed by the Hon ble Madras High Court in the case of Sundaram Fasteners Ltd. - 2014 (304) ELT 7 (Mad), Hon ble Chattishgarh High Court in Vandana Vidyut Ltd. - 2016 (331) ELT 231 (Chhattisgarh) and Hon ble Bombay High Court in the case of GL V India Pvt. Ltd. Ltd. - 2015 (321) ELT 611 (Bom.) Further, he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its viries was challenged before the Hon ble Bombay High Court and for keeping proper account of the credit admissible, in the event they succeed before the Hon ble Bombay High Court, the credit was availed by them in their books of accounts for record purposes only. No doubt the principle for recovery of interest, when credit has been availed but not utilized is settled by the judgment of the Hon ble Supreme Court in the case of Ind Swift Laboratories case (supra) however, the principle cannot be mechanically applied without examining the context of the case, where the ratio is required to be applied. In the present case, the appellant during the relevant period required to discharge duty under Section 3A of Central Excise Act, 1944 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
