2014 (1) TMI 52 - AT - Central Excise

Interest on delayed payment under Rule 8 of Central Excise Rule, 2002 r.w Section 11AB of Central Excise Act, 1944 Held that - The appellant consumed the intermediate products within the factory premises/refinery - if the assessee would have availed the benefit of the provisions of Rule 6(3) of Cenvat Credit Rules, 2004, he need not have discharged the duty liability on the intermediate products -whatever duty liability has been discharged by the appellant, he has availed the Cenvat credit for discharging the duty liability on various other products - both the lower authorities have confirmed the interest liability on the appellant, which seems to be not in consonance with the law - the appellant is eligible for the Cenvat credit of duty payment made by them, when the fuel is used for generation of electricity, which was specifically consumed for manufacture of excisable as well as non-excisable goods Following COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, VADODARA-II Versus M/s GUJARAT NARMADA FERTILIZERS CO LTD 2012 (4) TMI 309 - GUJARAT HIGH COURT order set aside Decided inf avour of Assessee.

Summary

Issues:
Interest liability under Rule 8 of Central Excise Rules, 2002 read with Section 11AB of the Central Excise Act, 1944.

Analysis:
The appeal was against the confirmation of interest liability on the appellant due to delayed payment of duty under Rule 8 of Central Excise Rules, 2002. The appellant had paid the differential duty for certain months after the due dates, leading to a demand for interest. The lower adjudicating authority upheld the interest amount, which was further confirmed by the first appellate authority.

The appellant argued that they should not be liable for interest as they had discharged the duty liability and availed Cenvat credit. They relied on a judgment of the Honorable High Court of Gujarat and a previous case decision by the Bench that set aside a similar interest demand. The Assistant Commissioner argued that interest liability arises if an amount is not discharged by the assessee, citing relevant case law.

The Tribunal considered the submissions and found that the appellant had consumed intermediate products within the factory premises and had discharged duty liability, availing Cenvat credit. The lower authorities had confirmed interest liability, which the Tribunal deemed not in line with the law. The Tribunal noted that the appellant was eligible for Cenvat credit and referenced a judgment in favor of the assessee by the Honorable High Court of Gujarat. The Tribunal also mentioned a previous rectification of mistake application that corrected a similar issue.

Regarding the case laws cited by the Assistant Commissioner, the Tribunal differentiated the current case from the Bayer ABS Limited case, emphasizing the eligibility of Cenvat credit by the same unit. The Tribunal found that the issues in the SKF India Limited case were not directly applicable to the current case. Consequently, the Tribunal held that the confirmation of interest demand was not sustainable and set it aside, allowing the appeal.