TMI Blog2010 (12) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... REPRESENTED BY : Ms. Naynaben K. Gadhvi, Standing Counsel, for the Appellant. None, for the Respondent. [Order per : Harsha Devani, J. (Oral)]. - Leave to add substantial questions of law as proposed vide the amendment. 2. In this appeal under Section 35G of the Central Excise Act, 1944 (the Act), the Commissioner, Central Excise Customs, Vapi has challenged the order dated 13-8-2008 [2009 (238) E.L.T. 522 (Tribunal)] made by the Customs, Excise Service Tax Appellate Tribunal (the Tribunal), proposing the following three questions : [1] Whether or not the CESTAT is right in holding that M/s. Sweet Industries, Daman is not required to pay any interest on Cenvat Credit availed on input/raw material destroyed in the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as imposition of penalty under Rule 13(2) of the Rules read with Section 11AC of the Act. 4. The show cause notice culminated into an order made by the adjudicating authority whereby the adjudicating authority dropped the demand for recovery of Cenvat Credit of Rs. 18,51,272/-. However, he directed recovery of interest at appropriate rate under Section 11AB of the Act on delayed payment of duty on finished goods, Cenvat Credit availed on raw material destroyed in the fire accident and semi-finished goods destroyed in the fire accident, and confirmed the demand of interest of Rs. 58,435/-. 5. The assessee carried the matter in appeal before the Commissioner (Appeals) who vide the order dated 28-9-2006, dismissed the appeal. The Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the provisions of Sections 11A and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries. It was submitted that the provisions of Section 11AB of the Act would, therefore, also be applicable in case where the Cenvat Credit has been taken or utilized wrongly or has been erroneously refunded and as such the view taken by the Tribunal is erroneous and warrants interference. 8. As can be seen from the impugned order of the Tribunal, before the Tribunal, on behalf of the assessee, interest liability on finished goods had been admitted. Insofar as the interest on the Cenvat Credit of Rs. 1,25,844/- reversed by the assessee on inputs contained in semi-finished goods destroyed in fire, it was submitted that in the light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case. Therefore, the demand of interest on this amount also cannot be upheld. Coming to the Cenvat Credit of Rs. 6,38,393/- taken on capital goods, in view of the fact that the credit was not at all utilized as mentioned in the appeal memo submitted by the appellants, and in view of the decisions of the Tribunal cited above that interest is not payable if the credit has not been utilized, the demand for interest on this amount also has to be set aside. I am not going into the merits of other contentions since the benefit of non-levy of interest on this ground alone is sufficient. 9. Thus, insofar as the demand confirmed by the adjudicating authority on the interest on delayed payment of duty on finished goods is concerned, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly or has been erroneously refunded. However, for the reasons that follow, the Court is not inclined to interfere with the impugned order of the Tribunal. 11. Rule 12 of the Rules provides that where Cenvat Credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer and the provisions of Sections 11A and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries. 12. In the facts of the present case, the assessee had availed of Cenvat Credit to the extent of 50% of the Cenvat Credit in respect of the capital goods availed by it after the fire accident. Since, the assessee was not entitled to avail Cenvat Credit after the accident, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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