2009 (3) TMI 204 - HC - Central Excise

Utilization of CENVAT credit for payment of Central Excise duty on clearance of final products for the relevant period - Held that - We quash and set aside the impugned communications dated 8-1-2001 22-1-2001 and 29-1-2001 issued by the respondent Nos. 4 and 5 and declare that the petitioner No. 1 was entitled to utilise the CENVAT credit for payment of Central Excise duty on the clearance of final products for the relevant period. See NOBLE DRUGS LTD. Versus COMMISSIONER OF C. EX. NASIK 2007 (7) TMI 327 - CESTAT MUMBAI

Summary

Issues involved:
Challenge against communications issued by Assistant Commissioner and Superintendent regarding payment of Central Excise duty and utilization of CENVAT credit.

Analysis:
The petitioners challenged communications issued by the Assistant Commissioner and Superintendent regarding the payment of Central Excise duty and the utilization of CENVAT credit. The petitioner, a limited company manufacturing excisable goods, contended that amendments to Rule 49 post-1-1-2000 now required fortnightly duty payments on goods removal. Due to financial difficulties, the petitioner faced delays in duty payments, resulting in the withdrawal of the fortnightly payment facility. Subsequently, the respondents directed the petitioner to pay duty in cash and not utilize CENVAT credit. The petitioners sought a declaration to use CENVAT credit for duty payments. The Court noted that the issue had been settled by the Kerala High Court and CESTAT, establishing the right to use CENVAT credit for duty payments. The Assistant Solicitor General did not contest the legal position established by these judgments.

The Court acknowledged the settled legal position based on the Kerala High Court and CESTAT judgments, which concluded that CENVAT credit could be used for Central Excise duty payments. As the Assistant Solicitor General did not challenge this legal stance, the Court upheld the petitioner's right to utilize CENVAT credit for duty payments. Consequently, the Court quashed the impugned communications issued by the respondents and declared the petitioner's entitlement to use CENVAT credit for Central Excise duty payments on the clearance of final products for the relevant period. The rule was made absolute in favor of the petitioners, with no order as to costs.