TMI Blog2007 (12) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee wrongly though the same was paid by the assessee prior to issuance of show cause notice. With the result the substantial question of law formulated in this appeal is answered in favour of the appellant Revenue. - 47 of 2006 - - - Dated:- 14-12-2007 - V. Gopala Gowda and Arali Nagaraj, JJ. Shri T.M. Venkatareddy, CGSC, for the Appellant. Shri G. Sampath and S. Raghu , Advocates, for the Respondent. [Judgment per : Arali Nagaraj, J.].- This central excise appeal is filed under Section 35G(2) of Central Excise Act (for short "the Act") by the Revenue challenging the order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zone Bench, Bangalore (for short "Tribunal"), dated 8-9-2005 in E.A. No. 111 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from 12-6-96 to 30-12-00 at the rate of 25% on the said amount of credit. Penalty under Rule 173Q of the Excise Rules was also proposed in the said notice. A corrigendum to show cause notice (Annexure-C) was also issued to the respondent assessee on 12-2-02. (c) The assessee submitted his reply to the said show cause notice stating that the said credit was taken on the basis of the permission granted by the Asst. Commissioner vide C.No. IV/16/258/94 modvat dated 15-3-96 and, on being pointed out by the audit that the said equipments were not covered under the Modvat scheme the assessee paid the entire amount of credit without any delay even before the show cause notice was issued to him and therefore there was no mala fide intention to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission of the learned counsel for both the parties. Shri T.M. Venkata Reddy, learned Central Govt. Standing Counsel, contended that the Tribunal committed serious error in reversing the concurrent findings of the First Appellate Authority and Assessing Authority holding that since the respondent assessee had reversed the credit wrongly availed by him before the Assessing Authority could issue show cause notice against him he was not liable to pay interest on the said credit. He further submitted that the Tribunal did not properly apply to the facts of the present case the principles laid down in the case of Rashtriya Ispat Nigam Ltd. v. CCE, Visakhapatnam reported in (2003) 161 E.L.T. 285 (Tri.-Bang.) that was upheld by the Hon'ble A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt [2004 (163) E.L.T. A53]. Reliance also placed on Karnataka High Court judgment rendered in the case of CCE, Mangalore v. Shree Krishna Pipe Industries [2004 (61) RLT 17 (Kar.)] and the Larger Bench of the Tribunal judgment rendered in the case of CCE, Delhi-III, Gurgaon v. Machino Montel (I) Ltd., [2004 (168) E.L.T. 466 (Tri.-LB.)]. He prays to set aside the penalty. In view of the admitted position that the duty has been paid even before the issue of show cause notice, the demand of interest is not sustainable. Respectfully following the ratio of the cited judgments, the appeal is allowed with consequential relief." 7. On a perusal of the above order it could be seen that the Tribunal passed the same without properly con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the Cenvat credit has been taken or utilised wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of Sections 11A, 11AA and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries. (2) Where the Cenvat credit has been taken or utilized wrongly on account of fraud, willful misstatement, collusion or suppression of facts, or contravention of any of the provisions of the Act or the rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty and the provisions of Section 11AC of the Act shall apply mutatis mutandis." On a plain reading of the above rule it is clear that since the respondent assessee used the Cenv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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