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M/s Goodyear India Ltd Versus The Commissioner of Central Excise, Delhi-IV

2015 (10) TMI 2456 - PUNJAB & HARYANA HIGH COURT

Duty demand u/s 11AB - Whether the appellant is liable to pay interest under Section 11AB of the Act or interest liability is to be determined in terms of clause (v) of Section 88(4) of the Finance Act, 2004 as incorporated by Section 124 of the Finance Act, 2005 - Held that:- Section 88(1) of the 2004 Act retrospectively amended Rule 3(6) of the 2002 Rules providing that AED (GSI) Credit accrued prior to 1.4.2000 could not be used for payment of BED and SED. However, sub-section (4) of Section .....

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issuing show cause notice for recovery under Section 11A of the Act and not for levy of interest under Section 11AB of the Act. The appellant had wrongly utilized AED (GSI) Credit pertaining to period prior to 1.4.2000 in 2003 immediately after amendment to Rule 3(6) of 2002 Rules. Thus, the interest liability under Section 11AB of the Act would commence from 1st day of the following month when wrong utilization had taken place till the payment of wrongly utilized credit. - The relevant clause ( .....

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(GSI) Credit still remains outstanding on the date of the coming into force of Finance Act, 2005. - No substantial question of law arises - Decided against assessee. - CEA No. 36 of 2015 (O&M) - Dated:- 27-8-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr. M.P. Devnath, Adv. with Mr. Amrinder Singh, dv. and Mr. Amar Pratap Singh, Adv JUDGMENT Ajay Kumar Mittal, J. 1. CM No.17618-CII of 2015 is allowed and the appellant is permitted to make good the deficiency in court fee .....

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in facts & circumstances of present case impugned order is correct when the CENVAT has been utilized by the appellant in accordance with law? (iii) Whether in facts & circumstances of present case impugned order is correct when the appellant has paid the entire amount much before their due date? (iv) Whether in facts & circumstances of present case impugned order is correct when interest has been demanded from the appellant in contravention of the settled legal principles? (v) Any ot .....

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riod in question, the appellant was procuring the tyre cord fabric which attracted levy of Basic Excise Duty (BED) and Additional Excise Duty under Goods of Special Importance Act, 1957 [AED (GSI)]. From 1995 to 2003, the appellant was taking credit of AED (GSI) and was not utilizing the same. Accordingly, unutilized balance of credit of AED (GSI) lying with the appellant on 1.3.2003 was ₹ 15,43,76,318/-. The Finance Act, 2003 made amendments to Cenvat Credit Rules, 2002 (in short "20 .....

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0. Section 88 of the Finance Act, 2004 (for brevity "2004 Act") amended Rule 3(6) of the 2002 Rules retrospectively providing that only the AED (GSI) credit accrued after 1.4.2000 could be utilized for payment of BED and SED on the finished products and not the credit accrued prior to 1.4.2000. The adjudicating authority vide order dated 19.4.2005 (Annexure A-4) confirmed the duty demand to the tune of ₹ 8,71,12,812/- along with interest and dropped the penalty proceedings. It al .....

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6.2005 (Annexure A-7) before the Tribunal who vide order dated 14.1.2015 (Annexure A-1) upheld the order of the adjudicating authority and dismissed the appeal. Hence, the present appeal. 3. The primary issue which arises for consideration of this Court is as to whether the appellant is liable to pay interest under Section 11AB of the Act or interest liability is to be determined in terms of clause (v) of Section 88(4) of the Finance Act, 2004 as incorporated by Section 124 of the Finance Act, 2 .....

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NVAT Rules, 2002.- (1) In the CENVAT Credit Rules, 2002 made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944), in rule 3, in sub-rule (6), in clause (b), the Explanation shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified in the Second Schedule, on and from the corresponding date mentioned in column (3) of that Schedule and, accordingly, notwithstanding anything contained in .....

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ection 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) which has been availed but which would not have been availed if the amendment made by sub-section (1) was in force at all material times and the provisions of CENVAT Credit Rules, 2002 relating to the recovery of CENVAT credit, along with interest shall apply for the recovery made under this sub-section subject to the modification that the relevant date defined in Section 11A of the Central Excise Ac .....

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ot; has the meaning assigned to it in the CENVAT Credit Rules, 2002." 6. It would also be expedient to refer to other statutory provisions and the rules framed thereunder. Section 11A of the Act provides for recovery of duties not levied or not paid or short levied or short paid or erroneously refunded. Section 11AB of the Act as it existed at the relevant time mandates payment of interest on delayed payment of duty. The relevant portion of the said provision reads thus:- "11AB. Intere .....

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ation in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of section 11A till the date of payment of such duty. XX XX XX XX XX XX" Under Rule 12 of the 2002 Rules, the revenue is empowered to recover CENVAT Credit wrongly taken by the manufacturer. It reads thus:- "Ru .....

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lized for payment of BED and SED, the recovery of CENVAT Credit along with interest shall be made under Rule 12 of 2002 Rules read with Section 11A and interest would be liable under Section 11AB of the Act. The relevant date specified in the provision as 10.9.2004 is for the purpose of determining the period of limitation for issuing show cause notice for recovery under Section 11A of the Act and not for levy of interest under Section 11AB of the Act. According to Section 11AB of the Act, inter .....

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