9911796707
TMI Blog2006 (6) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... ility for the period 1997-98 at Rs. 42,00,000/- per annum. As per the relevant provisions of the Central Excise Rules the appellants were required to pay duty of Excise at the rate of Rs. 750 per metric tonne at the time of clearance of their final products and the balance amount shall be paid on 31-3-1998. Later this period was extended to 30-4-1998. When the compounded levy scheme was introduced the Cenvat credit lying unutilised as on 1-9-97 stood lapsed. The appellant on the date of introduction of the compounded levy scheme i.e. 1-8-97 had a balance of Rs. 10.80 lakhs in the Cenvat credit. The appellants challenged the validity of Section 3A before the Hon ble High Court of Kerala. The High Court stayed the operation of the scheme and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Metric Tonne (MT) of their final production comes to around Rs. 1455 per MT. Out of which, they have collected only Rs. 1435/- per MT. Therefore, there cannot be any excess collection over and above the duty payable. Hence Section 11D cannot be invoked. Further when the Kerala High Court gave the interim order, the appellants discharged the duty liability under Section 4 and in those circumstances, there is no bar to availment of Cenvat Credit. Hence, Section 11D cannot be invoked in the circumstances of the case. It was also pointed out that their actual clearances were much below the annual capacity of production as determined under the Rules. As regards the demand of interest, it was pointed out that at the time of clearance the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accept the contention of the learned advocate for the following reasons. With the introduction of compounded levy scheme and requirement of payment of duty under Section 3A, the modvat credit lapses. The appellants challenged the vires of Section 3A in the Kerala High Court. The Kerala High Court in the interim order stayed the operation of Section 3A. Later the appellants did not get any favourable order from the Kerala High Court, therefore, they started paying duty under Section 3A. They have also stated that they discharged their entire duty liability of Rs. 42 lakhs in terms of Section 3A. If these facts are accepted, the availment of Modvat credit for payment of duty is not legal for the reason that the Modvat credit has lapsed. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
