2007 (6) TMI 537 - AT - Central Excise

Summary

Issues involved:
Confirmation of recoverable interest amount under Rule 12 of Cenvat Credit Rules, 2002 read with Section 11AB of the Central Excise Act, 1944.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI was against the Order-in-Appeal No. PI/187/2006, dated 5-5-2006. The issue revolved around the recovery of interest from the respondent concerning the availed Cenvat credit on inputs, some of which were deemed obsolete and written off from the accounts by the respondent. The Revenue sought to recover interest under Rule 12 of Cenvat Credit Rules, 2002 read with Section 11AB of the Central Excise Act, 1944. The Commissioner (Appeals) considered the case law and found that the respondent had reversed the Cenvat credit amount before the issuance of the show cause notice, which, according to the case law, negated the levy of interest under Section 11AB. The Commissioner (Appeals) concluded that the interest demanded was liable to be set aside based on the timing of credit reversal and show cause notice issuance.

The Appellate Tribunal noted that the Commissioner (Appeals) found no evidence indicating that the respondent had wrongly availed the credit in violation of Rule 12. The Tribunal concurred with the Commissioner's decision, stating that in the absence of any contrary evidence, the impugned order did not warrant interference. Consequently, the Tribunal upheld the impugned order and rejected the appeal filed by the Revenue. The judgment emphasized the importance of timing in reversing credits and the applicability of relevant legal provisions and case law in determining the liability for interest under the Central Excise Act, 1944.

This detailed analysis highlights the Tribunal's consideration of the evidence and legal provisions, as well as the application of case law in deciding on the recoverable interest amount issue under the Cenvat Credit Rules and the Central Excise Act.