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2022 (11) TMI 794 - HC - Central ExciseCENVAT Credit - benefit under Section 73 of the Finance Act 2010 without paying 24% interest per annum from the due date as contemplated under Section 73(2) of the Finance Act, 2010 - proviso to Rule 6(7) of the CENVAT Credit Rules 2004 - whether the subsequent amendment that was brought into force in the year 2010 and was given retrospective effect, can be put against the assessee? - HELD THAT - There is no dispute with regard to the fact that the respondent had reversed the credit with interest by availing of the option provided under Section 73(2) of the Finance Act, 2010, on 01.08.2007, even before the issuance of show cause notice. Reliance can be placed in the case of COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II VERSUS ICMC CORPORATION LTD. 2014 (1) TMI 1646 - MADRAS HIGH COURT where it was held that Considering the fact that the assessee had reversed the credit even prior to the amendment and the order of the Tribunal is in fact no different from what is contemplated under the Finance Act, 2010, we do not find anything survives further for this Court to consider the merits of the case pleaded by the Revenue. There is no manifest error in the final order passed by the Tribunal and the substantial question of law raised in this appeal is answered accordingly.
Issues:
- Challenge to order passed by Customs, Excise and Service Tax Appellate Tribunal - Demand of amount equivalent to 10% of value of exempted goods under Rule 6(3) of Cenvat Credit Rules, 2004 - Interpretation of Section 73(2) of the Finance Act, 2010 - Applicability of interest rate for delayed payment - Precedent cases and their impact on the present appeal Analysis: 1. The appeal was filed by the Revenue against the order of the Customs, Excise and Service Tax Appellate Tribunal, challenging the dropping of proceedings against the respondent for a demand of Rs.1,09,00,260 under Rule 6(3) of the Cenvat Credit Rules, 2004. 2. The Tribunal concluded that the respondent, by reversing the credit with interest before the show cause notice was issued, had complied with Section 73(2) of the Finance Act, 2010. This led to the appeal before the High Court to determine whether the respondent could avail of this benefit without paying the full 24% interest as required. 3. The appellant argued that the respondent did not pay the full 24% interest as mandated by the amendment to the Finance Act, 2010, and therefore should not benefit from Section 73(2). In contrast, the respondent relied on previous judgments to support their position that the interest rate amendment should not apply retroactively in this case. 4. The High Court analyzed the relevant judgments, including Commissioner of Central Excise vs. ICMC Corporation Ltd. and C.C.E. vs. Mount Mettur Pharmaceuticals Limited, which emphasized the need for the assessee to reverse the credit before the amendment to the Finance Act, 2010, for the interest rate change to be applicable. 5. Based on the precedents and the facts of the case, the High Court found that the respondent had complied with the requirements of Section 73(2) before the amendment came into effect. Therefore, the Court upheld the Tribunal's decision, dismissing the appeal and stating that there was no error in the final order. 6. Consequently, the Civil Miscellaneous Appeal was dismissed, and no costs were awarded. The judgment emphasized the importance of timely compliance with statutory provisions and the impact of relevant amendments on the rights of the parties involved.
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