2009 (4) TMI 22 - HC - Central Excise

Order of attachment for failure on part of the petitioner to make payment through the P.L. Account - it is apparent that the petitioner, who has already made the payment by utilising CENVAT credit is ready & agreeable to make payment in cash / from P.L. Account, if the petitioner is granted re-credit to the CENVAT account, which was utilised for making payment of identical sum held that respondent authority is directed to lift the attachment order

Summary

Issues:
Challenge to order of attachment for failure to make payment of Central Excise Duty through P.L. Account, dispute over utilization of CENVAT credit for duty payment, communication between petitioner and respondent authorities regarding payment, readiness of petitioner to make payment in cash or from P.L. Account if re-credit to CENVAT account is allowed.

Analysis:
The petition challenges an attachment order due to the petitioner's failure to pay Rs.24,29,387 through the P.L. Account for Central Excise Duty. The petitioner paid the duty with interest for September 2006 on 3/1/2007 instead of October or November 2006, leading to a dispute with respondent authorities. The authorities questioned the use of CENVAT credit for duty payment in November and December 2006, discovered during an audit inspection in April 2008. Subsequent communications demanded payment of Rs.23,95,653 + education cess in cash or from P.L. Account, culminating in the attachment order of 9/3/2009.

The affidavit-in-reply referenced a communication from the petitioner to the authorities, expressing willingness to pay from P.L. Account if re-credit to CENVAT account is allowed. The petitioner sought clarification on the duty already paid and the possibility of re-crediting the CENVAT account, as advised by the Assistant Commissioner of Central Excise, Anand.

Acknowledging the petitioner's readiness to pay within fifteen days by cash or from P.L. Account if re-credit to CENVAT account is permitted, the court directed the petitioner to file an undertaking by 2/4/2009 and make the payment by 16/4/2009. Upon compliance, the respondent authority was instructed to lift the attachment within three working days. Re-credit to the CENVAT account was allowed only after actual payment in cash or from P.L. Account.

The judgment allowed the petition on the specified terms, with no costs imposed. The decision resolved the dispute over duty payment and attachment, emphasizing the petitioner's commitment to settle the outstanding amount subject to the conditions outlined by the court.