2005 (10) TMI 400 - AT - Central Excise

Summary

Issues:
1. Applicability of Cenvat Credit Rules on Additional Excise Duty (AED) (GSI) payments.
2. Retrospective amendment to Rule 3(6) of Cenvat Credit Rules, 2002.
3. Utilization of credit for payment of Central Excise duty.
4. Disallowance of credit based on duty payment date.

Analysis:
1. The appellant appealed against an adjudication order by the Commissioner of Central Excise regarding the classification of rubberized cord fabric and the payment of Additional Excise Duty (AED) (GSI). The Tribunal previously ruled against the appellant, leading to the payment of AED (GSI) on 24-1-2004. Subsequently, a show cause notice was issued for irregular credit utilization, citing an amendment to Rule 3(6) of the Cenvat Credit Rules, 2002, which restricted credit to AED (GSI) paid after 1-4-2000.

2. The appellant argued that the credit was rightfully taken on 24-1-2004, post the specified date, and relied on a circular allowing credit utilization for Central Excise duty. The Revenue contended that the duty payment date (24-1-2004) related to goods manufactured in 1997, falling under the amended rule's restrictions. The Tribunal noted the retrospective amendment but emphasized the legitimate credit utilization for duty paid post the specified date.

3. The Tribunal highlighted the appellant's entitlement to credit based on the duty payment date and the utilization of credit for Central Excise duty, as per the Cenvat Credit Rules and the circular clarifications. The retrospective amendment did not affect the appellant's rights, as the credit was taken and utilized post the specified date, rendering the disallowance of credit unsustainable.

4. The Tribunal set aside the adjudication order, noting that the retrospective amendment was not applicable in this case, and the denial of credit based on duty payment date was unfounded. The Commissioner's reliance on the amendment was deemed beyond the scope of the show cause notice, leading to the allowance of the appeal solely on merit, without delving into other raised issues.

This detailed analysis of the judgment outlines the key legal arguments, interpretations, and conclusions regarding the applicability of Cenvat Credit Rules, retrospective amendments, credit utilization, and the disallowance of credit based on duty payment dates in the case.