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2014 (3) TMI 349 - AT - Central ExciseAvailment of CENVAT Credit - Availment after default - whether the credit accumulated during defaulting period could be used for paying duty after coming out of default - Held that:- During the defaulting period there is no bar on taking credit. There is bar only on utilization of credit. Whenever a demand is confirmed against an assessee, the assessee can pay the duty liability through cash or CENVAT credit so long as there is no specific prohibition against such payment through CENVAT credit. Such prohibition exists as per Rule 8(3A) only when the assessee is in default. Once they come out of the default by paying the defaulted amounts in cash, they can pay the duty liability using CENVAT credit. The fact that they had used it prior to coming out of default can result in payment of interest on such amount and no demand on such amount again - At any rate, it is obvious that there will be some interest liability on the applicant since the duty paid through Cenvat credit during defaulting period cannot be taken as proper discharge of duty. This interest amount is not seen quantified. Further a penalty also is payable - Conditional stay granted.
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