2010 (8) TMI 789 - AT - Central Excise

Issues Involved:
1. Maintainability of the appeal.
2. Legality of Cenvat credit utilization.
3. Entitlement to refund of duty and interest.
4. Applicability of amendments and notifications.
5. Validity of Circular No. 201/9/2003-C.X. 6 dated 15-10-2003.

Issue-wise Detailed Analysis:

1. Maintainability of the Appeal:
The Tribunal initially dismissed the Revenue's appeal due to improper authorization. However, the Hon'ble High Court of Bombay remanded the case back to the Tribunal for a decision on merits. Consequently, the Tribunal took up the appeal for disposal.

2. Legality of Cenvat Credit Utilization:
The respondent availed Cenvat credit from 1-7-2003 to 5-7-2003, utilizing Rs. 2,89,284/- for duty payment in June 2003. It was alleged that this contravened sub-rule (3) of Rule 3 of the Cenvat Credit Rules, 2002. Upon realizing they weren't required to pay the duty due to Notification No. 18/2003-C.E. (N.T.), the respondent filed a refund claim. The adjudicating authority allowed restoration of the credit but rejected the refund claim. The Commissioner (Appeals) observed that the restriction on utilizing Cenvat credit was removed by Notification No. 18/2003 effective from 18-3-2003, making the utilization for June 2003 legally correct.

3. Entitlement to Refund of Duty and Interest:
The Commissioner (Appeals) noted that the lower authority erred in rejecting the refund claim based on a circular, stating that no circular can override the benefits provided by a notification. The appellants were not required to pay duty through the personal ledger account, and thus, there was no question of delayed payment or interest. The Commissioner (Appeals) allowed the appellants to take credit in either the Personal Ledger Account or Cenvat Account and directed the lower authority to refund the interest amount of Rs. 2,84,284/-.

4. Applicability of Amendments and Notifications:
The Revenue argued that the amendment by Notification No. 13/2003-C.E. (N.T.) effective from 1-4-2003 was enforceable, and the respondent wrongly availed the credit. However, the respondent contended that Notification No. 18/2003-C.E. (N.T.) effective from 1-4-2003 had taken over the amendment, and the proviso to sub-rule (3) of Rule 3 was not in the statute book. The Tribunal examined the statute book and confirmed that the substitution by Notification No. 18/2003 was effective from 1-4-2003, supporting the respondent's claim.

5. Validity of Circular No. 201/9/2003-C.X. 6 dated 15-10-2003:
The Commissioner (Appeals) doubted the existence of the circular and emphasized that even if it existed, it could not deprive the benefits provided by the notification. The Tribunal found no force in the Revenue's argument supported by the circular and upheld the Commissioner (Appeals)'s decision.

Conclusion:
The Tribunal rejected the Revenue's appeal and upheld the impugned order, confirming the respondent's entitlement to the Cenvat credit and refund of interest. The cross-objections were disposed of accordingly.

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