2005 (5) TMI 230 - AT - Central Excise

Summary

Issues:
1. Recovery of 8% amount under Rule 57CC on Rectified spirit cleared without payment of duty during a specific period.
2. Confirmation of the entire amount by the Commissioner and the appropriateness of orders against reversals made by the assessee.
3. Involvement of penalty under Section 11AC and interest under Section 11AB for the demand period.

Analysis:
1. The main issue in this case revolves around the recovery of the 8% amount under Rule 57CC on Rectified spirit cleared without duty payment. The Commissioner's order was challenged by the Revenue, primarily on the grounds related to the confirmation of specific amounts and reversals made by the assessee. The Commissioner's decision to confirm only a partial amount and the subsequent reversals were questioned by the Revenue.

2. The Tribunal examined the provisions of Rule 57CC and the actions taken by the assessee in reversing the amount. It was noted that there is no provision under Rule 57CC for the recovery of such an amount, which is neither duty nor credit of Modvat. The Tribunal emphasized that the assessee's reversals demonstrated good faith and should be accepted by the Revenue, especially considering the absence of any dispute on the quantification of the amount.

3. Regarding the involvement of penalty under Section 11AC and interest under Section 11AB, the Tribunal clarified that these provisions are applicable only in cases of duty demands, not for Modvat credit. Citing a Supreme Court decision in the case of Raghuvar India, it was established that Rule 57CC amounts, when recovered, do not warrant penalties under Section 11AC or interest under Section 11AB. Therefore, the Tribunal found no valid reasons to interfere with the Commissioner's order and subsequently dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the Commissioner's decision and dismissed the Revenue's appeal, emphasizing the lack of grounds to support interference with the original order.