2015 (10) TMI 2077 - AT - Central Excise

Denial of CENVAT Credit - Held that - With effect from 18.08.2000 the appellants could not have utilised the Cenvat credit available for the subsequent period for payment of duty of the earlier period. - In the case of Hindalco Industries Ltd. (2013 (12) TMI 698 - CESTAT MUMBAI), we find that the payment related to the fortnight i.e. 1.08.2000 to 15.08.2000 i.e. the fortnight was for the period prior to the amendment of the Rule 57AB, which is not the case here. The present case is relating to payment of duty relating to fortnight after the said Notification. - Appellant is required to pay the amount confirmed in the original order in cash. Appellant will however, be free to take credit of the equal amount in their records for future clearances. Keeping in view the overall facts of the case, penalty imposed under Rule 173C(1) is set aside - Decided partly in favour of assessee.

Summary

Issues:
Interpretation of Rule 57AB regarding utilization of Cenvat credit for duty payment.

Analysis:
The case involved a dispute regarding the utilization of Cenvat credit for excise duty payment as per Rule 57AB. The appellant had paid duty using Cenvat credit available after the specified date instead of utilizing credit available on the last day of the relevant fortnight. The Revenue contended that duty must be paid in cash for the period after the specified date. The Tribunal analyzed the Rule and the amendment made on 18.08.2000 to clarify the ambiguity. The amendment clearly stated that Cenvat credit available for the subsequent period cannot be used for payment of duty of the earlier period. This interpretation was crucial in determining the correct method of duty payment.

The appellant cited various case laws to support their contention that only interest should be demanded for the alleged non-compliance. However, the Tribunal focused on the specific language of the Rule and the impact of the 2000 amendment. The Tribunal emphasized that the Rule explicitly restricted the utilization of Cenvat credit to the amounts available on specific dates for duty payment. The judgment highlighted the importance of adhering to the Rule's provisions and the significance of the 2000 amendment in clarifying the utilization of Cenvat credit for duty payment.

In reviewing the judgments presented by the appellant, the Tribunal distinguished the cases based on the timing of duty payments in relation to the Rule amendment. The Tribunal referenced previous cases to establish the prospective effect of the 2000 amendment and its application to duty payments made after the specified date. The judgments cited by the appellant were found to be inapplicable to the current case, which involved duty payment after the Rule amendment. This analysis helped in contextualizing the legal precedents and applying them correctly to the present situation.

Ultimately, the Tribunal dismissed the appeal, requiring the appellant to pay the confirmed amount in cash as per the original order. However, the appellant was permitted to take credit of the same amount for future clearances. The penalty imposed under Rule 173C(1) was set aside considering the timing of the violation in relation to the rule amendment. The judgment provided a clear resolution based on the interpretation of Rule 57AB and the subsequent amendment, ensuring compliance with the specified provisions for duty payment.