2011 (7) TMI 1176 - Commission - Central Excise

Summary

Issues Involved:
1. Settlement of duty liability for various Show Cause Notices (SCNs).
2. Validity of payments made through Cenvat credit accounts.
3. Compliance with interest liability.
4. Immunity from penalty and prosecution.

Issue-wise Detailed Analysis:

1. Settlement of Duty Liability for Various SCNs:
The case involves the settlement of disputes arising from four SCNs issued by the Additional Director General, DGCEI, Mumbai, and the Additional Commissioner, Central Excise, Raigad. The applicant's duty liability was settled at Rs. 3,27,44,213.79 for the first SCN and Rs. 6,62,106/- for the remaining three SCNs, totaling Rs. 3,34,06,320/-. The Bench found that the applicant had claimed to have made payments of Rs. 4,06,24,448/-, resulting in an excess payment of Rs. 72,18,128/-. The applicant was allowed to take back credit in respective Cenvat accounts to the extent of the excess amount.

2. Validity of Payments Made Through Cenvat Credit Accounts:
The Bench examined whether the Cenvat credit could be utilized for discharging differential duty liability for past clearances. The Bench observed that the Cenvat Credit Rules permit the utilization of Cenvat credit for payment of "any duty of excise on any final product." There is no express bar or stipulation in the Cenvat Credit Rules restricting the utilization of Cenvat credit for discharging differential duty liability for past clearances. Therefore, the Bench held that the payment of excise duty through Cenvat credit was legally valid and acceptable. However, a dissenting opinion by one member stated that the utilization of credit from another unit's Cenvat account was not permissible and directed the applicant to pay Rs. 75,00,000/- from their own Cenvat account or by cash.

3. Compliance with Interest Liability:
The Bench directed the applicant to calculate the interest liability on the settled amount of Central Excise duty as specified in the Final Order dated 6-11-2006 and deposit the full amount of interest due within 30 days. The Revenue was given the liberty to check the correctness of the interest liability, and any further amount to be paid by the applicant would have to be settled within 15 days of receipt of such communication.

4. Immunity from Penalty and Prosecution:
There was no change in the extent of immunity from penalty and prosecution as allowed in the Final Order dated 6-11-2006. The immunities were subject to the condition that the applicant deposits the full amount of interest due within the specified time period.

Separate Judgment:
One member dissented on the issue of utilizing Cenvat credit from another unit, arguing that the Cenvat Credit Rules do not allow such utilization and that refund of Cenvat credit is only permissible under specific conditions, such as export of goods. The member directed the applicant to make the payment of Rs. 75,00,000/- from their own Cenvat account or by cash and to recalculate the interest liability accordingly.

Conclusion:
The majority view prevailed, and the order was made accordingly, affirming the legal validity of utilizing Cenvat credit for payment of duty liability and directing compliance with interest liability within the specified time frame.