2012 (6) TMI 193 - HC - Central Excise

Writ petition Cenvat credit - Deputy Commissioner of Central Excise ordered recovery of credit claimed by the petitioner suo motu in their Cenvat Credit account under Rule 12 of the Cenvat Credit Rules 2001 - imposed as fine under Rule 13 of the Cenvat Credit Rules 2001 against which an appeal was filed to the first respondent, the Commissioner of Central Excise (Appeals) along with a stay application claiming waiver of duty and penalty Held that - suo motu taking credit by the petitioner is not justified and beyond the scope of Cenvat scheme. issue deserves to be considered in the main appeal filed by the petitioner before the first respondent. Further, the learned counsel for the petitioner states that the company is now revived. since a substantial amount has already been debited and also taking note of the interim order and the pendency of this case for a long period of time, it will be appropriate to direct the disposal of the appeal on merits.

Summary

Issues:
Petition for writ of certiorarified mandamus to quash order of Deputy Commissioner of Central Excise and direct appeal hearing without pre-deposit.

Analysis:
The petitioner filed a writ petition seeking a writ of certiorarified mandamus to challenge the order of the Deputy Commissioner of Central Excise Chennai II Division. The order in question involved the recovery of credit claimed by the petitioner in their Cenvat Credit account, along with the imposition of a fine. An appeal was filed with the first respondent, the Commissioner of Central Excise (Appeals), requesting a waiver of duty and penalty. The first respondent, after considering the case, concluded that the petitioner's claim for credit was not justified under the Cenvat scheme. Despite a partial payment made by the petitioner, the first respondent did not grant a waiver of the remaining amount. This decision led to the filing of the writ petition challenging the interim order passed by the Commissioner of Central Excise (Appeals).

The High Court, upon admission of the case, granted interim injunction in favor of the petitioner, considering the company's status as a sick industrial unit and pending proceedings before the BIFR. A counter affidavit was filed by the respondents, disputing the petitioner's claims and highlighting the need for further recovery based on the expunged credit amount. The petitioner argued that their claim was based on a decision of the Division Bench of the Court and should be considered in the main appeal before the first respondent. Additionally, the petitioner emphasized the revival of the company and the substantial amount already debited, suggesting that the appeal should be decided on merits without additional deposit.

In light of the arguments presented, the Court directed the Commissioner of Central Excise (Appeals) to expedite the disposal of the appeal within six weeks from the date of the order, without requiring any further deposit. The writ petition was allowed accordingly, with no costs imposed on either party.