2005 (11) TMI 329 - AT - Central Excise

Summary

Issues:
1. Alleged failure to pay Cenvat credit for inputs sent to job workers.
2. Utilization of Cenvat credit for payment of duty.
3. Imposition of penalty and charging interest under Cenvat Credit Rules.

Analysis:
1. The appeal involved the alleged failure of M/s. Fiat India Pvt. Ltd. to pay an amount equivalent to the Cenvat credit for inputs sent to job workers, not received back within 180 days. The Adjudicating Authority confirmed the demand, citing Rule 4(5)(a) of the Cenvat Credit Rules, 2001/2002 and erstwhile Rule 57AC(5)(a) of the Central Excise Rules. The Authority invoked Rule 12 for interest recovery due to delayed payment beyond 180 days.

2. The Commissioner (Appeals) upheld the order, stating that Rule 4(5)(a) aims to ensure timely return of goods, not penal actions. The Commissioner invoked Rule 13 for penal provisions. The appellants contended that no time limit was specified for reversing credit under Rule 4(5)(a), arguing against penalty and interest imposition without a prescribed time limit in the rule.

3. The Tribunal considered the appellants' argument that Rule 4(5)(a) lacked a time limit for credit reversal. The Tribunal found the rule self-contained, requiring reversal within 180 days. It upheld the invocation of Rules 12 and 13 for interest and penalty, respectively, due to the delay in credit reversal causing loss to the revenue. The Tribunal modified the penalty under Rule 13 to Rs. 50,000, deeming the original penalty disproportionate to the offense.

In conclusion, the Tribunal upheld the imposition of interest and penalty under Rules 12 and 13, respectively, due to the delay in reversing Cenvat credit, causing loss to the revenue. The penalty was reduced to Rs. 50,000 to align with the offense revealed.