2014 (11) TMI 243 - AT - Central Excise

CENVAT Credit - Negligent in taking credit as invoice is incomplete - Held that - Duty is payable fortnightly i.e. for the first fortnight the duty is payable by 15.6.2000, in the facts and circumstances, and not at the time of clearance of the goods. Further, there is no obligation cast on receiver of the goods to monitor the payment of duty by the manufacturer clearing the goods and accordingly, the contention of the Revenue is untenable and their appeal fit to be rejected - Decided against Revenue.

Summary

Issues: Liability for interest on CENVAT credit availed by the assessee.

Analysis:
1. Background: The appeal by the Revenue stemmed from an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai-IV.

2. Facts of the Case: The respondent-assessee, engaged in manufacturing excisable goods, received capital goods from a supplier under two invoices, availing CENVAT Credit of 50% initially and the remaining 50% in the next financial year. The supplier deposited the duty in two parts, with a delay in the second installment.

3. Order-in-Original: A show-cause notice led to the issuance of an Order-in-Original holding the assessee liable to pay interest on the CENVAT Credit availed during a specific period.

4. Decision of Commissioner (Appeals): The Commissioner (Appeals) ruled that interest under Section 11AB is payable by the person liable to pay duty. As the assessee was not liable to pay duty in the given circumstances, no interest demand was justified, citing relevant case laws.

5. Grounds of Appeal: The Revenue contended that the assessee was negligent in availing the credit, as evidenced by the blank column in the invoice regarding the manner of duty payment.

6. Counter-argument by the Assessee: The assessee's counsel argued that duty payment was due fortnightly, not at the time of goods clearance, and there was no obligation on the receiver to monitor the manufacturer's duty payment.

7. Tribunal's Decision: After reviewing the contentions, the Tribunal upheld the Commissioner (Appeals)'s decision, stating that interest is payable by the individual responsible for duty payment. Consequently, the Tribunal dismissed the Revenue's appeal.

8. Conclusion: The Tribunal's judgment affirmed that interest liability on CENVAT credit availed depends on the duty payment responsibility, ultimately leading to the dismissal of the Revenue's appeal.