2016 (11) TMI 1130 - AT - Central Excise

Utilisation of CENVAT credit account - agriculture submersible pumps - Held that - There is no dispute of the fact that the entire amount collected has been deposited with the Dept,.albeit by debiting their CENVAT Credit account and the said fact has been acknowledged in the show cause Notice as well as in the impugned order. The grievance of the department is that the excess amount paid by debiting CENVAT Credit amount, instead of availing the exemption, is recoverable from under Section 11D of CEA,1944. As submitted by the Ld. Advocate, the issue is squarely covered by the judgment of Hon ble Rajasthan High Court in the case of UOI Vs Shivam Metals 2013 (6) TMI 145 - RAJASTHAN HIGH COURT where it was held that Recovery order issued by the Department on the basis of Section 11D of the Act was absolutely illegal and is liable to be quashed. Appeal allowed - decided in favor of assessee.

Summary

Issues:
Appeal against order passed by Commissioner of Central Excise (Appeals) - Duty payment at concessional rate - Recovery under Section 11D of Central Excise Act, 1944.

Analysis:
The appeal before the Appellate Tribunal CESTAT AHMEDABAD was filed against the order passed by the Commissioner of Central Excise (Appeals) AHMEDABAD-I, regarding the duty payment by the appellants at a higher rate instead of availing the benefit of exemption Notification No. 10/2006 CE. The appellants, manufacturers of excisable goods falling under Chapter 84 of CETA, 1985, paid duty at 16% instead of the concessional rate of 8% applicable to agriculture submersible pumps during the period of Sept. 2007 to December 2007, utilizing their CENVAT account. A demand notice was issued under Section 11D of the Central Excise Act, 1944, for the excess duty paid. The appeal was filed after the demand was confirmed with a penalty, and the Ld. Commissioner (Appeal) rejected their appeal, leading to the present appeal before the Tribunal.

The Tribunal noted that the entire amount collected by the appellants had been deposited with the Department by debiting their CENVAT Credit account, as acknowledged in the show cause notice and the impugned order. The dispute centered around the recoverability of the excess amount paid by debiting the CENVAT Credit account instead of availing the exemption under Section 11D of the Central Excise Act, 1944. The Ld. Advocate argued that the issue was covered by a judgment of the Hon'ble Rajasthan High Court in the case of UOI Vs Shivam Metals - 2015(326) ELT 558(Raj.). The Tribunal, after considering the submissions, set aside the impugned order as lacking merit and allowed the appeal, granting consequential relief as per the law.

In conclusion, the Tribunal's judgment provided relief to the appellants by setting aside the order of the Commissioner of Central Excise (Appeals) AHMEDABAD-I and allowing the appeal against the recovery of the excess duty paid under Section 11D of the Central Excise Act, 1944. The decision was based on the acknowledgment of the deposit made by the appellants and the legal arguments presented, including the reference to a relevant judgment from the Hon'ble Rajasthan High Court.