2014 (2) TMI 689 - AT - Central Excise

Reversal of cenvat credit more than the credit availed on removal of inputs as such - Waiver of pre-deposit - The Hon ble High Court has reversed the decision of the Tribunal and held that the appellant cannot pay excess amount on the inputs as duty and holding so, they directed the appellant to pay the entire amount paid in excess through PLA and also upheld the penalties imposed under Rule 15 of the Cenvat Credit Rules, 2004. - Held that - appellant to deposit an amount of Rs.1,68,99,531/- in cash - stay denied. Regarding penalty under Rule 25 - Held that - prima facie, the penalty imposed by the adjudicating authority under the provisions of Rule 25(1)(a) of the Central Excise Rules, 2002 may not arise, as the said provisions would indicate that the penalty under Rule 25(1)(a) can be imposed only if the manufacturer removes any excisable goods in contravention of any of the provisions of this rule. It is on record that the appellant had discharged the Central Excise duty on the inputs removed as such and that too more than the actual duty. Hence, the provisions of Rule 25(1)(a) of Central Excise Rules do not prima facie get attracted. - Stay granted towards penalty. Regarding penalty under Rule 15 - Held that - the said issue was not argued before the Hon ble High Court and framed as question of law and we find that during the relevant period in this case i.e. July, 2006 to June, 2008, the period during which the appellant discharged the duty on the inputs cleared by them through CENVAT account, they had an order of the Tribunal in their favour and the provisions of Rule 15(1) reproduced herein above may not prima facie indicate that the appellant needs to be penalized for such contravention. - Stay granted towards penalty.

Summary

Issues:
Recovery of excess amount paid by the appellant.

Analysis:
The issue in this case revolves around the recovery of an amount paid by the appellant in excess of what was required. The appellant availed CENVAT Credit of Central Excise duty paid on inputs, subsequently clearing these inputs to customers on paying Central Excise duty on the manufactured goods at a value exceeding the CENVAT Credit availed. The Revenue authorities contested this practice, leading to a legal dispute. A prior Tribunal decision in favor of the appellant was overturned by the Hon'ble High Court, directing the appellant to pay the excess amount through PLA and upholding penalties under relevant rules.

In the judgment, the Tribunal considered the arguments presented by both parties. The appellant contended that they were entitled to avail credit of the amount paid through CENVAT account and challenged the penalties imposed. The Revenue, on the other hand, supported the penalties upheld by the High Court and pushed for the payment of the required amount in cash along with a pre-deposit of interest for the appeal hearing.

The Tribunal ruled that the appellant must deposit the differential amount paid through CENVAT Credit in cash within a specified timeframe, as per the High Court's decision. Regarding the penalties imposed, the Tribunal found that the penalty under Rule 25(1)(a) of the Central Excise Rules may not apply in this case, as the appellant had paid the duty on inputs more than required. Therefore, the Tribunal waived the pre-deposit of this penalty. Similarly, the Tribunal analyzed Rule 15 of the Cenvat Credit Rules and concluded that the appellant had a case for the waiver of the penalty imposed under this rule during the relevant period.

Furthermore, the Tribunal dismissed the need for a pre-deposit of interest, as the amount already required for deposit was deemed sufficient to proceed with the appeal. The stay petition was disposed of with directions for compliance reporting and waiver of the balance amount of dues adjudged until the appeal's disposal.

In conclusion, the judgment addressed the recovery of excess payments, penalties imposed, and pre-deposit requirements, providing detailed reasoning for each aspect while considering the legal provisions and previous court decisions.