2009 (6) TMI 844 - AT - Central Excise

Cenvat/Modvat - absence of statutory machinery for recovery of any amount of 8% of the price of exempted final product in terms of Rule 57CC(2)

Summary

Issues:
1. Recovery of amount demanded under Rule 57CC(2) of the Central Excise Rules, 1944.
2. Imposition of penalties under various provisions of the Central Excise Rules.

Issue 1 - Recovery of amount demanded under Rule 57CC(2):
The original authority demanded Rs. 1,33,700 from the assessee for the period December 1997 to March 1998 under Rule 57CC(2) of the Central Excise Rules, 1944. The department sought to recover this amount under Rule 57-I of the said Rules and imposed interest under Section 11AB of the Central Excise Act, 1944. The Commissioner (Appeals) allowed the appeals by holding that the amount demanded under Rule 57CC(2) could not be recovered from the assessee as there was no statutory machinery for it. The department argued that 8% of the price of exempted final product cleared by the assessee could be recovered under Rule 57-I, citing Board circulars. The Tribunal found that Rule 12 of the Cenvat Credit Rules, 2002 did not provide for recovery of amounts under Rule 57CC(2) and dismissed the appeals.

Issue 2 - Imposition of penalties:
The original authority imposed a penalty on the assessee under Rule 57-I(4) and Rule 173Q of the Central Excise Rules, 1944, along with a separate penalty on the Chief Executive under Rule 209A. The department sought to recover the penalties in the appeals. The Tribunal, after considering the arguments, dismissed the appeals, stating that there was no provision in the rules for the recovery of penalties under the circumstances presented.

In conclusion, the Tribunal dismissed the appeals concerning the recovery of demanded amounts under Rule 57CC(2) and the imposition of penalties under various provisions of the Central Excise Rules. The decision was based on the lack of statutory provisions for such recoveries and penalties under the relevant rules, as clarified by previous legal interpretations and circulars.