2013 (12) TMI 750 - AT - Central Excise

Condonation of delay Held that - The Revenue filed this appeal on 6.2.2004 - by letter dated 15.4.2004 the assessee filed the cross-objection on 19.4.2004 - the assessee filed the cross-objection in a letter within the stipulated period - they filed the cross-objection in proper form - As the cross-objection was originally filed within the stipulated period, the COD application filed by the assessee is dismissed as infructuous. Recovery of Duty and Interest Held that - The respondent/assessee was one of the units of National Textile Corporation (TN & P) Ltd. a Government of India undertaking - the assessee paid duty in the month of August 2001 from CENVAT account instead of PLA/cash during the period of forfeiture under Rule 8 of Central Excise Rules, 2001 Following Noble Drugs Vs. CCE 2007 (7) TMI 327 - CESTAT, MUMBAI - the period of forfeiture facility for payment of duty on fortnightly basis, is required to pay duty out of the PLA - The provisions of Rule 8(4) are pari material with Rule 173G(1)(e) and the non-obstantive clause was introduced by insertion of sub-rule 3A in Rule 8 of the Central Excise Rules, 2002, only w.e.f. 31.3.2005 - the recovery of duty and interest which shall be paid in PLA/cash are set aside Decided against Revenue.

Summary

Issues:
1. Condonation of delay application for filing cross-objection.
2. Utilization of CENVAT credit for discharging differential duty liability during forfeiture period under Rule 8(4) of Central Excise Rules.

Analysis:
1. Condonation of Delay Application:
The Revenue appealed against the imposition of penalty, while the assessee filed a cross-objection against the duty demand. The dispute arose regarding the condonation of delay for filing the cross-objection. The Revenue argued that the delay was significant and should not be condoned, whereas the assessee contended that they filed the cross-objection within the stipulated period and later filed it in proper format. The Tribunal found that the cross-objection was initially filed within the required time, rendering the condonation of delay application irrelevant. Consequently, the appeal and cross-objection were taken up for disposal.

2. Utilization of CENVAT Credit:
The assessee, a unit of a government undertaking, utilized CENVAT credit to discharge differential duty liability during a forfeiture period under Rule 8(4) of the Central Excise Rules. The Commissioner ordered the duty payment along with interest in PLA/cash, allowing credit for the amount paid in CENVAT. The assessee argued that based on precedents like the Noble Drugs case, during forfeiture, payment of duty on a fortnightly basis could be made from PLA or CENVAT credit without attracting interest or penalty. The Tribunal referred to various legal decisions supporting this view and held that the assessee's actions were in line with the law. Consequently, the recovery of duty and interest to be paid in PLA/cash was set aside, and the appeal by the Revenue was dismissed, while the cross-objection by the assessee was allowed.

In conclusion, the Tribunal's judgment favored the assessee's position regarding the utilization of CENVAT credit and the payment of duty during the forfeiture period. The legal precedents and interpretations supported the assessee's actions, leading to the dismissal of the Revenue's appeal and the allowance of the assessee's cross-objection.