TMI Blog2011 (7) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... l, DGCEI, Zonal Unit, Mumbai 2 V(11A)Adj/4-73/04/4488, dated 8-10-2004 Additional Commissioner, Central Excise, Raigad 3 V(11A)Adj/4-84/04/5019, dated 8-11-2004 Additional Commissioner, Central Excise, Raigad 4 V(11A)Adj/4-104/04-05/533, dated 7-2-2005 Additional Commissioner, Central Excise, Raigad 2. The facts of the case have already been stated in detail in the Final Order No. 186/F.O./CEX/GMD/2006, dated 6-11-2006 and in the preceding Final Order No. 47/Final Order/CEX/LKP/2009, dated 24-6-2009. These facts are, therefore, not reproduced here. However, relevant extracts from the Final Order dated 24-6-2009 to the extent relevant for final disposal of the matter are reproduced hereunder :- 15. During the last hearing, the Advocate for the applicant sought to persuade the Commission to also revive the duty calculated in respect of first SCN as well. This, he sought to do so by referring to the last sentence in the Hon ble High Court s order viz., Commission thereafter on hearing petitioners and Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the applicant. Revenue have further submitted that the interest also has not been paid by the applicant and thus the applicant has not fully complied with the Orders dated 6-11-2006 and 24-6-2009. 4. The case was finally heard on 24-5-2011. The applicant was represented by S/Shri S.S. Sekhon, Advocate and Sanjay Bhardwaj, Chartered Accountant. At the outset, the ld. Advocate submitted that duty has been paid as per Final Order dated 6-11-2006 passed by the Hon ble Bench. The ld. Advocate further stated that after passing of the above said Final Order dated 6-11-2006, the applicant had filed a Miscellaneous Applicated dated 14-12-2006 along with the calculation chart and prayed for consideration of two issues viz. (1) extension of time up to 14th December, 2007 to deposit the balance admitted duty liability in regular installments along with interest @ 18% and (2) consideration of certain arithmetical errors regarding the calculation of duty liability in respect of the aforesaid final order. However, the Hon ble Bench rejected the said Miscellaneous Application vide Miscellaneous Order dated 11-10-2007. Therefore the applicant had moved the Hon ble High Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-4-2006 whereby the amount of ₹ 40,00,000/- already deposited by the applicant against the admitted duty liability of ₹ 1,11,24,448/- was allowed to be adjusted and the applicant was directed to deposit the balance admitted amount within 30 days of receipt of the said order. Accordingly, the applicant has deposited the balance amount of ₹ 71,24,448/- through debit entry No. 37/2003, dated 3-5-2006 in R.G. 23A Pt.II and intimated to the Commission. The Commission after confirming the deposit and having satisfied itself as to the compliance so made allowed the application to be proceeded for final settlement which is reflected in Para 14.7 of the Final Order No. 186/Final Order/CEX/GMD/2006, dated 6-11-2006. The ld. Advocate pointed out that the Department, however is now at this stage questioning the correctness of the said settle Cenvat debit of ₹ 71,24,448/- as well. To this, the Bench observed that as the said Cenvat debit of ₹ 71,24,448/- made by the applicant is a part of the amount of ₹ 1,11,24,448/- which was accepted by the Commission as having being paid towards duty liability in Final Order No. 186/Final Order/CEX/GMD/2006, dated 6-11- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of terms of settlement originally ordered, the applicants correct compliance or otherwise thereof - as the case may be, and the implications in terms of refunds/dues, of the present revision of amount and submit their report . 5.1 The ld. Representative of Revenue further submitted that it is quite clear from the Orders of Hon ble Bombay High Court that the Writ Petition was limited to only 3 impugned SCNs dated 8-10-2004, 8-11-2004 7-2-2005 issued by the Additional Commissioner, C.Ex., Raigad out of the 4 SCNs in question. He elaborated that vide original Final Order dated 6-11-2006, the SCN at Sr. No. 1 issued by DGCEI, Mumbai was settled for 3,27,44,213.79. In light of the Orders of Hon ble Bombay High Court, Hon ble Commission settled duly amount in respect of 3 impugned SCNs dated 8-10-2004, 8-11-2004 7-2-2005 issued by the Additional Commissioner, C.Ex., Raigad vide its Final Order dated 24-6-2009, at ₹ 6,62,106/-. Thus the total settled duty liability in the instant case works out to ₹ 3,34,06,320/-. 5.2 The ld. Representative of the Revenue, quoting extensively from the first provision to sub-rule (3) to Rule 3 of the Cenvat Credit Rules, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to work out the interest calculation in accordance with the terms of settlement originally set out in the Final Order dated 6-11-2006 as modified by settlement order dated 24-6-2009 and pay the same in cash. The ld. Advocate of the applicant then requested that ₹ 40 lalchs paid in cash by the applicant at the time of making the application may be allowed to be adjusted against the interest liability. The Bench observed that the said 40 lakhs was paid towards the admitted duty liability and hence the same is not available now for adjustment against any other liability. Findings of the Bench : 6. The Bench has gone through the records of the case and the submissions made by the applicants and the Revenue. The Bench observes that the Central Excise duty liability in this case already stands settled at ₹ 3,27,44,213.79 in respect of the first show cause notice dated 30-7-2004 vide original Final Order dated 6-11-2006, while in respect of the remaining three show cause notices the Central Excise duty liability stands settled at ₹ 6,62,106/- vide Final Order 24-6-2009. Thus, the total settled duty liability in respect of all the four show cause notices take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application to be proceeded with for settlement. 6.3 The objection raised by the Revenue at the finalization stage of the proceedings essentially raises the issue whether Cenvat Credit Rules allow utilization of Cenvat credit exclusively for discharging current Central Excise duty liability which is determined at the end of a month or quarter or whether Cenvat credit available in balance at any point of time can also be utilized for discharging differential duty liability for part clearances which gets determined at later stages as a result of investigation adjudication or settlement proceedings. The Bench observes that Rules 3(4) of the Cenvat Credit Rules, 2004 permits utilization of Cenvat credit for payment of any duty of excise on any final product . The Bench further observes that the restriction envisaged in first proviso to sub-rule (4) to Rule 3 extracted above is only in relation to discharge of current central excise duty liability in normal course of goods manufactured and cleared during the preceding month or quarter. There is no express bar or stipulation in the Cenvat Credit Rules restricting utilization of Cenvat credit for discharge of differential duty liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inasmuch as no prejudice whatsoever has been caused to the interest of revenue by utilizing the available Cenvat credit for payment of duty excise. 6.5 Moreover, the Bench finds that the applicant had kept jurisdictional Cenvat Excise Officers fully informed about having utilized Cenvat credit of ₹ 75,00,000/- towards payment of duty liability determined by Settlement Commission. This fact is adequately established from letter F. No. CEX/KPL-I/DPUOT-Oa, dated 22-2-2008 addressed by the Range Superintendent to the applicant. Revenue, however, neither issued any show cause notice in terms of Rule 14 of the Cenvat Credit Rules read with Section 11A of the Act proposing to disallow the so-called wrongly utilized Cenvat credit nor at any stage questioned the legal correctness of the said utilization of Cenvat credit till a report on payments made and outstanding dues, if any, was sought from the Revenue by the Commission vide para 17 of Final Order dated 24-6-2009. In this regard the ld. Advocate has rightly contested the Revenue s objection by pointing out that any action by the Revenue at this belated stage to disallow the Cenvat credit utilized by the applicant would have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of earlier Final Order No. 47/F.O./CEX/LKP/2009, dated 24-6-2009 for settlement of the case on following terms and conditions : CENTRAL EXCISE DUTY : The Central Excise duty liability in respect of the first show cause notice dated 30-7-2004 already stands settled at ₹ 3,27,44,214/- vide Final Order No. 186/F.O./CEX/GMD/2006, dated 6-11-2006. Further, total Central Excise duty liability in respect of the remaining three show cause notices dated 8-10-2004, 8-11-2004 7-2-2005 also stands settled at ₹ 6,62,106/-, vide Final Order No. 47/F.O./CEX/LKP/2009, dated 24-6-2009. Thus, aggregate amount of settled duty in respect of all the four show cause notices taken together stands at ₹ 3,34,06,320/-. The applicant is found to have made payments totaling to ₹ 4,06,24,448/-, towards duty, of which ₹ 40,00,000/- have been paid through PLA and the balance amount has been paid through debit entries in Cenvat [RG-23 (Pt.II)] Accounts. Thus, the applicant is found to have made an excess payment of ₹ 72,18,128/- towards duty. The applicant is allowed to take back credit in respective Cenvat [RG-23 (Pt.II)] Accounts to the extent of aforesaid excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reproduce the definition of inputs, final product as well as Rule 3(3) of the then existing Cenvat Credit Rules, 2002 to understand and to appreciate the issues in proper perspective. The said definition and the Rules are accordingly reproduced as under : x x x x (e) final products means excisable goods manufactured or produced from inputs, except matches x x x x (g) input means all goods, except high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether continued in the final product or not, and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production. Explanation 1 - The High speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2 - Inputs include goods used ..... 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