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2015 (9) TMI 351 - KARNATAKA HIGH COURTDuty demand - Duty paid through debit made in CENVAT Credit account - contravention of the provisions of Rule 8(3) of the Central Excise Rules, 2002 - Held that:- A bare reading of Rule 14 would indicate that where the assessee has taken or utilized wrongly or has been erroneously refunded the CENVAT credit, then authorities would be entitled to recover the same from the manufacturer or the provider of the output service and provisions of Sections 11A and 11AB of Central Excise Act or Sections 73 and 75 of the Finance Act would apply mutatis mutandis for effecting such recoveries. Thus, before initiating recovery proceedings, it would be incumbent upon the authorities to issue notice to the petitioners under Section 11A of the Act for having either utilized the CENVAT credit wrongly for bringing such action within the scope of sub-rule (3A) or to construe such transaction as having cleared the goods without payment of duty or in other words, such belated utilization of CENVAT credit for payment of central excise duty to be construed as one in contravention of sub-rule (3A) of Rule 8 - Court is of the view that impugned notices cannot be sustained as it is contrary to Rule 14 of CENVAT Credit Rules, 2004, and in violation of natural justice. - Decided in favour of assessee.
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