TMI Blog2013 (11) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... not be found fault with - Once section 11A (2B) provisions are applicable to a particular situation, the provisions of Sections 11A (1A), (2) and (2A) would not apply. The circumstances covered in Section 11A (2B) refers to duty of excise not being levied or short-paid on the final products is really surprising - Rule 14 clearly provides that for the purpose of recovery of wrongly utilized credit or wrongly taken credit, provisions of Section 11A and 11AB would apply mutatis mutandis - This does not mean that when Section 11A (2B) is invoked, it becomes duty and not the wrongly utilized CENVAT credit - the appellant has failed to make out any case whatsoever for setting aside the order demanding interest from the - Decided against Assessee. - E/2467/2011-SM - Final Order No. 26788/2013 - Dated:- 17-10-2013 - SHRI B.S.V. MURTHY, J. For the Appellant : Mr. B. Raghavendra, Advocate For the Respondent : Ms. Sabrina Cano, Superintendent (AR) JUDGEMENT Per : B.S.V. Murthy; The appellant is engaged in the manufacture of pipes and availing the credit of duty paid on inputs and capital goods and service tax paid on input services which are used in the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ataka in the case of Bill Forge Pvt. Ltd.: 2012 (279) E.L.T. 209 (Kar.). 3. Ongoing through the records and after hearing both the sides, it was found that the claim of the learned counsel that the appellant had positive balance throughout the relevant period itself was not correct and was contrary to the facts. According to the letter of August 27th, 2009, written by the appellant, this claim was made besides making the same claim before me. Ongoing through the Annexures to the letter, it is noticed that there was a clear balance of Rs.24, 88,553/- in the excise duty account and this was after the transfer of Rs.25 lakh from the Cess account. This shows clearly that but for the transfer of Rs. 25/- lakhs from the Education Cess account, the balance in the month of January would have become negative straightaway. Therefore the claim of the appellant that they had positive balance throughout the period from January 2008 till the date they made the payment itself is totally false. It is also noticed that there was closing balance of Rs.6, 13,623/- in March 2008 and Rs.3, 66,433/- in April 2008, which would show that in these months also the balance would have been negative but for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the notice; Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, [as if, for the words one year, the words five years were substituted: Explanation. - Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. (2) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (2A) Where any notice has been served on a person under sub-section (1), the Central Excise Officer, - (a) In case any duty of excise has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-section (2B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. (3) For the purposes of this section, - (i) refund includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (ii) relevant date means, - (a) In the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid (A) Where, under the rules made under this Act a periodical return, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; (B) Where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (C) In any other case, the date on which the duty is to be paid under this Act or the rules made thereunder; (b) In a case where duty of excise is provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act or Sections 73 and 75 of Finance Act, shall apply mutatis mutandis for effecting such recoveries. 8. It was the submission of the learned counsel that what is being demanded is CENVAT credit and the same has been treated as duty, since Section 11A has been mentioned in Rule 14 and therefore there should have been determination of duty in this case. 9. I am unable to accept this argument. Section 11A (2B) is an exception to the procedure prescribed in Section 11A. It caters to a situation where an assessee makes a voluntary payment and there is no suppression or fraud or mis-declaration or collusion, etc. The Section itself provides for recovery of the entire amount and it also provides that subsection 2B would not apply where there is fraud, suppression, mis-declaration, etc. when Section 11A has been made applicable for recovery/payment of credit wrongly taken or utilized, it would be unfair to an assessee to make a claim that when the credit is treated as duty, determination under section 11A (2) is a must. What Rule 14 of CCR%, 2004 means is that whole of the provisions of section 11A would be applicable and what we have to see is applicability of section 11A2(B) also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty payment by utilizing the credit of Education Cess and SHE is considered as valid payment and when no objections whatsoever has been raised in terms of Section 11A ibid the recovery of credit/interest in terms of Rule 14 is impermissible. * Further, Rule 14 of CCR states that where credit is utilized wrongly .. the same along with interest shall be recovered from the manufacturer .. and the provisions of Sections 11A and 11AB of the Excise Act,. shall apply mutatis mutandis for effecting such recoveries. * The expression that the provisions of Sections 11A and 11AB for effecting such recoveries in the context refer to the wrongly utilized credit which is Rs.25 lakhs in the present case. Since the SCN has not sought to recover the wrongly utilized credit of Rs.25 lakhs, the SCN is liable to be set aside as the SCN is the foundation of initiating the proceedings. * The situation covered in Section 11A(2B) will not apply in the facts of present case since the circumstances covered in Section 11A(2B) refers to duty of excise not being levied or short paid on the final products. However, in the present case, the department has accepted the duty (paid through Educati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. To overcome this, they have transferred the amount from the cess account to the BED account. This amounts to claiming that when a person is prohibited from entering the house through the front door, he can enter the house from back door, which is not permissible. As regards the question of utilizing the education cess for BED, I agree with the learned counsel that the department should have treated the goods as being cleared without payment of duty and liable to confiscation and proceeded to impose penalty under Rule 25 of the Central Excise Rules. No doubt the department has not done this and they have treated them under Section 11A(2B) which provides for a lenient treatment for a law abiding assessee. It may be noted that if the department were to take the option which is being claimed as the one that should have been utilized, the department had 5 year s time to issue show-cause notice and mandatory penalty also could have been claimed to have been applicable. I am surprised that after misusing the credit and wrongly applying the law, the appellants are claiming that the department should have treated them more harshly, when no harsh treatment is made by the department and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return and in the absence of any other mechanism to intimate the assessee that the amount paid has been accepted as correct or accepted as such, the claim that department has accepted the amount paid by them has no basis. 17. As regards the submissions that the situation covered in Section 11A (2B) would not apply in the facts of the present case since the circumstances covered in Section 11A(2B) refers to duty of excise not being levied or short-paid on the final products is really surprising. Rule 14 clearly provides that for the purpose of recovery of wrongly utilized credit or wrongly taken credit, provisions of Section 11A and 11AB would apply mutatis mutandis. This does not mean that when Section 11A (2B) is invoked, it becomes duty and not the wrongly utilized CENVAT credit. Therefore this submission cannot be accepted. 18. Under these circumstances, the appellant has failed to make out any case whatsoever for setting aside the order demanding interest from them. As regards penalty, under the circumstances wherein the appellants have made false claims in their submissions and false claim before the Tribunal also, I do not consider it requires any interference in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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