TMI Blog2010 (3) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat – Availment of - the Commissioner dropped proposals to disallow credit of Additional Excise Duty under Goods of Special Importance Act, 1957 taken by the respondent CEAT Ltd. (CEAT), on payment of equal amount of BED on tyres in PLA which had been initially discharged using accumulated Cenvat/Modvat credit of AED (GSI). M/s. Balakrishna Industries Ltd. seeks relief by way of appropriate orders of this Tribunal against the impugned order which demanded such AED earned prior to 1-4-2000 and utilized for payment of BED in terms of Rule 3(6)(b) of Cenvat Credit Rules, 2002 (CCR) as amended vide Notification No. 13/03-C.E. (N.T.), dated 1-3-2003. This assails the order of the Commissioner confirming demand of duty paid on tyres using credit under AED (GSI).Held that – debits from AED were not recognized by department as duty payment. In that view, assessee could not claim their refund. Such debit could not effect balance of AED in assessee account. Assessee entitled to retain their AED credit to maintain status quo ante. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly amended to prohibit use of credit of AED (GSI) earned prior to 1-4-2000 for payment of BED. Vide Finance Act, 2005, government directed that such credit utilized for payment of BED shall be paid back in 36 equal instalments along with interest @ 13%. CEAT therefore paid the credit of AED (GSI) so utilized, through TR6 Challans. They debited equal amount in PLA after taking credit of deposits made through challans. On such debit, they took credit of the same amount under AED (GSI) in their Cenvat account. The present proceedings relate to Rs. 6,83,00,364/- paid between July, 05 to June, 06 and taken credit under AED (GSI). Vide the impugned order, the Commissioner held that the respondent discharged the liability to BED on tyres through PLA initially cleared using credit of AED (GSI); hence they were entitled to the credit of equal amount of AED (GSI). The said credit could be used only for payment of AED (GSI) in view of the Explanation to Rule 3 to Cenvat Credit Rules introduced under Finance Act, 2004. He found that the total credit the respondent had utilized and since taken in the account had been available in their account as on 1-3-03. Had they not used the same for paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant modvat/cenvat provisions prohibited utilization of AED (GSI) for discharge of BED payable on tyres and flaps, credit of such AED paid on inputs could not be utilized and accumulated in its account. As per Rule 3(6)(b) of CCR, Cenvat credit in respect of, inter alia, Additional Duty of Excise leviable under Sec. 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, shall be utilized only towards payment of duty of excise leviable under the said AED (GSI) Act. By issue of Notification No. 13/2003-C.E. (N.T.), dated 1-3-03, this prohibition was relaxed and the assessee was allowed use of AED (GSI) to discharge BED payable on tyres. The assessee had accumulated credit of Rs. 32,78,21,329/- which it utilized for payment of BED. Vide Sec. 88 of the Finance Act, 2004, Government restricted use of AED (GSI) for payment of BED and barred use of such AED (GSI) earned prior to 1-4-2000. Vide Sec. 124 of Finance Act, 2004, Government issued detailed directions for payment of BED discharged by the assessee along with interest @13% in 36 equal instalments. The assessee accordingly paid an amount of Rs. 65,54,373/- every month from July, 2005 to June, 2006. On payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in the accounts of the assessee. Therefore, once the appellant discharged the duty liability on tyres by debiting PLA, the appellant's account stood credited with the debits initially made. A refund claim is warranted when duty is excess paid. In the instant case, the payment from AED (GSI) was not recognized as payment of duty. Therefore, there was no question of the assessee claiming refund of the same. The transaction utilizing AED (GSI) should be held to have been cancelled. We find that that the Commissioner properly allowed the appellant to retain the AED (GSI) credit and maintain status-quo ante once the debits made towards BED during July, 2005 to June, 2006 was held to be not payment of duty. 7. We have considered the case laws cited by the ld. counsel for the respondents. We discuss them below seriatim. (i) In the Friends Wire Industries' case the appellant had utilized Modvat credit for payment of duty on a final product which was not declared under Rule 57G of the Central Excise Rules. While upholding demand of duty due on the final product cleared by debiting Modvat credit, the Tribunal held that duty was to be paid from PLA or in cash. When the duty was so paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount involved was not duty and limitation did not apply for its refund. (b) Comfit Sanitary Napkins (I) Pvt. Ltd. - 2004 (174) E.L.T. 220. In this case it was held that the assessee cannot suo motu take credit without applying for refund, when excess duty was paid. The conflict of views entailed the following reference to a Larger Bench of the Tribunal :- "If an assessee avails suo motu credit of the amount of duty paid in excess by him, whether the view taken by the Tribunal in the case of Comfit Sanitary Napkins (I) Pvt. Ltd. - 2004 (174) E.L.T. 220 will apply or the views taken by the Tribunal in the case of Motorola India Pvt. Ltd. - 2006 (193) E.L.T. 468 (Tri.) = 2007 (7) S.T.R. 613 (Tri.) = 2005 (71) RLT 334 will apply". The Tribunal answered the reference holding that all types of refund have to be filed under the Central Excise Act and Rules made thereunder and no suo motu credit of the duty paid in excess may be taken by the assessee. We find that the ratio of the BDH Industries Ltd. case relates to excess duty paid and the procedure to be followed for getting back such excess duty paid. Ratio of that case does not apply to the subject case. 19. The impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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