2013 (12) TMI 24 - AT - Central Excise

Interest on Excess cenvat credit Raw materials used are exempted - Whether the assessee is liable to interest in respect of excess availed credit Held that - The issue has attained finality and the Assistant Commissioner was bound by the direction contained in the said order of the Tribunal in spite of the reversal of the decision of the IND-SWIFT LABORATORIES LTD. Versus UNION OF INDIA 2009 (7) TMI 98 - PUNJAB & HARYANA HIGH COURT - the Revenue should have challenged the Tribunal s order before the appropriate forum by way of filing appeal so as to keep the matter alive - Revenue having not done so and having allowed the proceeding to arrive at dead end and the Tribunal s order to attain finality, they are not now entitled to avail the benefit of declaration of law by the Hon ble Supreme Court subsequent to the conclusion of the proceeding There is no infirmity in the order - Decided against Revenue.

Issues:
1. Excess Cenvat credit availed by the respondent.
2. Liability of the respondent for interest on excess availed credit.
3. Imposition of penalty on the respondent.
4. Challenge to the order of Commissioner (Appeals) by both the assessee and Revenue.
5. Refund claim filed by the assessee.
6. Remand proceedings initiated by the Assistant Commissioner.
7. Acceptance and finality of the Tribunal's order.
8. Applicability of subsequent declaration of law by the Hon'ble Supreme Court.

Issue 1: Excess Cenvat credit availed by the respondent

The respondent, engaged in the manufacture of various products, was issued a show cause notice alleging excess Cenvat credit availed pertaining to raw materials used in the manufacture of exempted products. The respondent accepted the allegation and reversed the credit. The Deputy Commissioner adjudicated the matter, confirming the interest and imposing a penalty.

Issue 2: Liability of the respondent for interest on excess availed credit

The Tribunal, considering the decision of the Hon'ble Punjab and Haryana High Court, remanded the matter to examine if the excess credit was utilized. The Deputy Commissioner granted a refund to the assessee based on the Tribunal's decision, which was not challenged by Revenue. However, the Assistant Commissioner confirmed the interest and penalty, citing a Supreme Court decision and a circular issued to safeguard revenue.

Issue 3: Imposition of penalty on the respondent

The Commissioner (Appeals) set aside the Assistant Commissioner's order, noting that the Tribunal's decision had attained finality and the subsequent Supreme Court decision did not apply as the Tribunal's order was not challenged by Revenue. The Commissioner held that the original adjudicating authority was bound by the Tribunal's direction.

Issue 4: Challenge to the order of Commissioner (Appeals) by both the assessee and Revenue

The Revenue challenged the Commissioner (Appeals)'s order, arguing that the subsequent Supreme Court decision should apply. However, the Commissioner held that Revenue should have challenged the Tribunal's order to keep the matter alive and that the original adjudicating authority was bound by the Tribunal's direction.

Issue 5: Refund claim filed by the assessee

The assessee filed a refund claim for the pre-deposited amount, which was granted by the Deputy Commissioner based on the Tribunal's decision, not contested by Revenue.

Issue 6: Remand proceedings initiated by the Assistant Commissioner

The Assistant Commissioner initiated remand proceedings, confirming the interest and penalty despite the Tribunal's decision and the refund granted by the Deputy Commissioner.

Issue 7: Acceptance and finality of the Tribunal's order

The Tribunal's order was not challenged by Revenue and was accepted by the Commissioner (Review). The Commissioner (Appeals) held that the Tribunal's decision had attained finality, and the Assistant Commissioner was bound by it.

Issue 8: Applicability of subsequent declaration of law by the Hon'ble Supreme Court

The Commissioner (Appeals) rejected Revenue's appeal, stating that the subsequent Supreme Court decision could not be applied as the Tribunal's order had not been challenged, emphasizing the importance of finality in legal proceedings.

This detailed analysis highlights the progression of the case, the decisions made at various levels, and the significance of finality in legal judgments.

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