2009 (9) TMI 860 - AT - Central Excise

Summary

Issues: Challenge to order for payment of amount, interest, and penalty based on contravention of Cenvat Credit Rules. Interpretation of Rule 6(2) and Rule 6(3) in maintaining separate accounts for cenvatable and non-cenvatable inputs.

In the judgment delivered by the Appellate Tribunal CESTAT NEW DELHI, the applicant contested an order requiring payment of Rs. 1,52,59,729/- along with interest and a penalty of Rs. 30 lakhs. The challenge was based on the allegation that the appellants, despite maintaining separate accounts for cenvatable and non-cenvatable inputs as per Rule 6(2) of the Cenvat Credit Rules, had intermittently utilized Rule 6(2)(3)(a) in violation of sub-rule (2) of Rule 6. The central issue raised was whether an assessee, facing difficulties in strict compliance with Rule 6(2), could avail benefits under Rule 6(3) of the Cenvat Credit Rules. This question was deemed significant, especially in light of the Nicholas Piramel (I) Ltd. v. CCE, Thane-I decision. The Tribunal acknowledged the need for a thorough examination of this issue and granted a stay of the impugned order, emphasizing the importance of expeditiously resolving the matter due to the substantial amount involved and the interests of Revenue.

The Tribunal, while disposing of the stay application, directed the Registry to prioritize the appeal for an expedited hearing on 1-12-09, along with other related appeals pending on similar issues. This proactive approach aimed to ensure a comprehensive consideration of the legal complexities involved in the interpretation and application of Rule 6(2) and Rule 6(3) of the Cenvat Credit Rules. The judgment reflected a balanced approach, recognizing the need for a fair assessment of the appellant's contentions while also upholding the importance of revenue interests and efficient resolution of the legal dispute.