2003 (10) TMI 427 - AT - Central Excise

Summary

Issues:
Violation of Central Excise Rules regarding utilization of Cenvat credit for payment of duty.

Analysis:
The case involves two appeals filed by M/s. Agni Steel Pvt. Ltd. and M/s. Agni Re-Rollers Pvt. Ltd. against Orders-in-Appeal passed by the Commissioner of Central Excise (Appeals), Cochin. The penalty was imposed on the appellants for utilizing the Cenvat credit, which was not due for utilization, for payment of duty on goods cleared during the first fortnight of August 2000. The learned JDR for Revenue argued that the penalty was rightly imposed due to the violation of rules.

Upon examination, it was found that the Cenvat credit taken up to 15-8-2000 was required to be utilized for payment of duty on 20th August 2000 for the clearances of the first fortnight, as per Notification No. 48/2000-C.E. (N.T.), dated 18-8-2000. However, the appellants utilized the Cenvat credit taken from 16th to 19th August 2000 for the duty payment on goods cleared during the first fortnight of August 2000. This act constituted a violation of Central Excise Rules, as determined by the Commissioner (Appeals), justifying the imposition of the penalty. The judge concurred with this assessment and upheld the Orders-in-Appeal passed by the Commissioner (Appeals), resulting in the dismissal of both appeals.

In conclusion, the judgment affirmed the penalty imposed on the appellants for misusing the Cenvat credit, which was not due for utilization, in contravention of the Central Excise Rules. The decision highlighted the importance of adhering to the prescribed procedures and timelines for utilizing credits and paying duties to maintain compliance with the regulatory framework governing excise duties.