2014 (11) TMI 869 - AT - Central Excise

Cenvat credit - short payment by utilizing more credit than the credit available - Held that - During the period of dispute, the appellant were also availing capital goods Cenvat credit in addition to the input duty Cenvat credit goods. While the account of input duty Cenvat credit was being maintained in RG-23A Pt. I and Pt. II register, the account of the capital goods Cenvat credit was being maintained in RG-23C I and II register. From the chart given in para 6 of the impugned order, it is seen that while in case of Unit - I, the total Cenvat credit including the capital goods Cenvat credit available as on 15/08/2000 and 31/08/2000 was ₹ 1,11,09,202/- and ₹ 1,28,68,887/- respectively, the utilization of Cenvat credit for payment of duty on these dates was ₹ 9,67,124/- and ₹ 33,00,407/- respectively and Cenvat credit available was much more than the amount which was utilized for payment of duty and as such it cannot be said that there was short payment of duty. Just because the debit entry of the duty paid was made in RG-23A Pt. II register, it cannot be inferred that the appellant had short paid the duty. Similarly, in respect of Unit - II, the total Cenvat credit including capital goods Cenvat credit available as on 15/08/2000 and 31/08/2000 was ₹ 55,11,200/- and ₹ 48,92,898/- respectively while the utilization of the credit for payment of duty was ₹ 41,77,000/- and ₹ 39,66,325/- and thus the total credit available on both the dates was much more than the credit utilized for duty payment. In this unit also the debit entry for the full amount was made only in RG-23A Pt. II register and from this, it cannot be concluded that the duty had been short paid. The impugned order, therefore, is not sustainable - Decided in favour of assessee.

Issues:
1. Dispute regarding payment of Central Excise duty for the month of August 2000.
2. Utilization of Cenvat credit for duty payment.
3. Allegation of short payment of duty against the appellant.
4. Orders by Additional Commissioner confirming duty demand and imposing penalties.
5. Appeals filed to Commissioner (Appeals) and subsequent orders.
6. Arguments presented by both sides regarding Cenvat credit utilization.
7. Analysis of Cenvat credit accounts for inputs and capital goods.
8. Decision on the sustainability of the impugned order.
9. Final judgment and allowance of the appeals.

Detailed Analysis:
1. The dispute in this case revolves around the payment of Central Excise duty for August 2000. The appellant, a cement manufacturer, was required to pay duty as per specific rules governing the first and second fortnights of the month.
2. The allegation against the appellant was that there was a short payment of duty amounting to a specific sum, based on the utilization of Cenvat credit for duty payment during the mentioned period.
3. The Additional Commissioner confirmed the duty demand and imposed penalties on the appellant for the alleged short payment of duty, following which appeals were filed to the Commissioner (Appeals).
4. The Commissioner (Appeals) upheld the Additional Commissioner's order with a reduction in the penalty, leading to the filing of appeals against these orders.
5. During the proceedings, the appellant argued that they maintained separate Cenvat credit registers for inputs and capital goods, ensuring sufficient credit balance for duty payment in both units.
6. The Department contended that even if there was a balance in the capital goods Cenvat credit account, it was not debited, resulting in the alleged short payment of duty by the appellant.
7. Upon analysis, it was found that the total Cenvat credit available for duty payment exceeded the amount utilized, indicating no short payment of duty in both units of the appellant.
8. The impugned order was deemed unsustainable as the appellant had maintained adequate Cenvat credit for duty payment, leading to the setting aside of the order and allowance of the appeals.
9. The final judgment allowed the appeals, overturning the previous decisions and ruling in favor of the appellant based on the analysis of the Cenvat credit accounts and utilization for duty payment.

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