2005 (5) TMI 491 - AT - Central Excise

Summary

Issues: Liability to pay interest on wrong availment of Modvat credit on HSD oil.

In this case, the appellants disputed their liability to pay interest on the wrong availment of Modvat credit on HSD oil. The Revenue claimed interest from 1998 when the credit was withdrawn retrospectively by the Government through an amendment. The appellants had challenged this amendment through a writ petition before the High Court, which initially granted a stay but later dismissed the petition on merits. The liability of the appellants to reverse the credit accrued from the date of dismissal of the writ petition. The Tribunal referred to a similar case decided by the Apex Court, where it was held that the time to make payment under the relevant Act should commence from the date of the review order of the Apex Court.

The Tribunal held that the demand of interest by the Revenue from the date of the retrospective amendment was not legally valid. The interest was deemed payable by the appellants after one month from the date of dismissal of their writ petition by the High Court until the date of payment. Citing the decision of the Apex Court in a similar matter, the Tribunal modified the impugned order accordingly. As a result, the appeal of the appellants was disposed of, and the order was dictated in open court.