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TMI Blog2016 (11) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... issuance of a show cause notice dated 17-12-2009 proposing to confirm the interest and imposition of penalty upon them. The said show cause notice culminated into an order passed by the original adjudicating authority confirming the interest of Rs. 11,959/- in terms of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 and also imposed penalty of Rs. 2,000/- under Rule 15A of the Cenvat Credit Rules. The said order stands upheld by the Commissioner (Appeals). 3. Hence the present appeal. 4. Learned advocate Shri Dattatray D. Bhat relies upon the Hon'ble Karnataka High Court's decision in the case of CCE & ST, LTU, Bangalore v. Bill Forge Pvt. Ltd. [2012 (279) E.L.T. 209 (Kar.) = 2012 (26) S.T.R. 204 (Kar.)] wherein, after considering the Hon'ble Supreme Court's decision in the case of UOI v. Ind-Swift Laboratories Ltd. [2012 (25) S.T.R. 184 (S.C.) = 2011 (265) E.L.T. 3 (S.C.)], the Hon'ble High Court held that if the wrongly availed credit does not stand utilised by the assessee and is reversed before utilisation, no interest liability would arise against them. As such, he submits that inasmuch as the credit having been taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentatives Shri Ajay Saxena, Commissioner and Shri N. Jagadish, Superintendent, for the respondent/Revenue. 10. The scope of Rule 14 of the Cenvat Credit Rules, 2004 (Rules, 2004) came to be considered by the Hon'ble Supreme Court in Union of India v. Ind-Swift Laboratories Ltd. - 2011 (265) E.L.T. 3 (S.C.) = 2012 (25) S.T.R. 184 (S.C.). This decision was considered in both the above decisions. 11. The relevant discussion and reasoning of the jurisdictional High Court in Bill Forge Pvt. Ltd. is set out in Paragraphs 20 to 22 : 20. From the aforesaid discussion what emerges is that the credit of excise duty in the register maintained for the said purpose is only a book entry. It might be utilised later for payment of excise duty on the excisable product. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. It matures when the excisable product is received from the factory and the stage for payment of excise duty is reached. Actually, the credit is taken, at the time of the removal of the excisable product. It is in the nature of a set off or an adjustment. The assessee uses the credit to make paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Therefore interest is payable from that date, though, in fact by such entry the Revenue is not put to any loss at all. When once the wrong entry was pointed out, being convinced, the assessee has promptly reversed the entry. In other words, he did not take the advantage of wrong entry. He did not take the Cenvat credit or utilize the Cenvat credit. It is in those circumstances the Tribunal was justified in holding that when the assessee has not taken the benefit of the Cenvat credit, there is no liability to pay interest. Before it can be taken, it had been reversed. In other words, once the entry was reversed, it is as if that the Cenvat credit was not available. Therefore, the said judgment of the Apex Court has no application to the facts of this case. It is only when the assessee had taken the credit, in other words by taking such credit, if he had not paid the duty which is legally due to the Government, the Government would have sustained loss to that extent. Then the liability to pay interest from the date the amount became due arises under Section 11AB, in order to compensate the Government which was deprived of the duty on the date it became due. Without the liability t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the question that arises for our consideration is as to which decision will apply to govern the case of the appellant. 16. A Larger (5 Members) Bench of CESTAT in Collector of Central Excise, Chandigarh v. Kashmir Conductors - 1997 (96) E.L.T. 257 (Tribunal) considered the very question viz., the decision of which Hon'ble High Court would constitute a binding precedent, in circumstances where different High Courts record conflicting ratios on a relevant proposition of law. The Larger Bench resolved this issue as follows : 10. The question as to how the Tribunal should proceed in the face of conflicting decisions of High Courts has been considered in M/s. Atma Steels P. Ltd. and Others v. Collector of Central Excise, Chandigarh reported in 1984 (17) E.L.T. 331 wherein the Larger Bench consisting of five Members held that, in view of its All India jurisdiction and peculiar features, the Tribunal cannot be held bound to the view of any one of the High Courts, but has the judicial freedom, to consider the conflicting views, reflected by different High Courts, and adopt the one considered more appropriate to the facts of a given case before the Tribunal. The Tribunal also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court having jurisdiction over the authority and the assessee, has not struck down the provision or Notification as ultra vires, the Tribunal has to follow the same and the assessee is entitled to take the stand that he is entitled to the benefit of the particular provision or Notification since the jurisdictional High Court has not struck it down, even though some other High Court may have done so. In case the conflict of decisions among High Courts does not relate to vires of any provision or Notification, it has been held that the Tribunal has to proceed in accordance with the decision in Atma Steels P. Ltd. in the light of the decision of Supreme Court in the East India Commercial Company case i.e. where the jurisdictional High Court has taken a particular view on interpretation or proposition of law, that view has to be followed in cases within such jurisdiction. If the jurisdictional High Court has not expressed any view in regard to the subject matter and there is conflict of views among other High Courts, then the Tribunal will be free to formulate its own view in the light of Atma Steels P. Ltd. case; however, there is a decision of only one High Court in regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional High Court, the Karnataka High Court, in Bill Forge Pvt. Ltd. has considered the decision of the Apex Court in Ind-Swift Laboratories Ltd. in extenso. Provisions of Section 11AB as inserted by Act 33 of 1976 w.e.f. 28-9-1996 have also been extracted and analysed. The decision of the Apex Court in Pratibha Processors v. Union of India - 1996 (88) E.L.T. 12 (S.C.) elucidating principles underlying levy of tax, interest and penalty has been referred to. The position under the Modvat scheme and the principles thereof as expounded in the Apex Court's decision in Commissioner of Central Excise, Pune v. Dai Ichi Karkaria Ltd. - 1999 (112) E.L.T. 353 (S.C.) and in Commissioner of Central Excise, Mumbai-I v. Bombay Dyeing & Mfg. Co. Ltd. - 2007 (215) E.L.T. 3 (S.C.) and of the Gujarat High Court in Commissioner of Central Excise v. Ashima Dyecot Ltd. - 2008 (232) E.L.T. 580 (Guj.) = 2008 (12) S.T.R. 701 (Guj.) were also considered. A detailed analysis of Rule 14 of the Cenvat Credit Rules is set out and after a critical analysis of relevant statutory provisions and judgments of the Apex Court and other relevant precedents, the jurisdictional High Court in Bill Forge Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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