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TMI Blog2008 (10) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... learned advocate on behalf of the appellant submitted that different rules covered the issue of demand of Cenvat credit availed wrongly during the period under dispute. Rule 57-I was in force from July 1997 to 31-3-2000, Rule 57AH was in force from 1-4-2000 to 30-6-2001 and Rule 12 has been in force thereafter. He also submitted that w.e.f. 11-5-2001, Section 11AA and Section 11AB of Central Excise Act, 1944 were amended so as to render recovery of interest under Section 11AA inapplicable after 11-5-2001 and recovery of interest under Section 11AB inapplicable prior to 11-5-2001. Since the show cause notices in respect of M/s. Nirayu was issued on 30-12-2002 and in respect of M/s. Alembic was issued on 28-10-2002, amended provisions of Section. 11AB and Section 11AA are applicable to the case of the appellant. He submitted that the appellants had always pleaded that interest can be demanded from them under Section 11AB and in view the amendment of the Section, interest can be demanded only for the period w.e.f. 11-5-2001 in view of settled legal position. He cited several decisions of the Tribunal in support of his argument which we will discuss while recording our findings on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said rule, serve notice on the manufacturer or the assessee who has taken such credit requiring him to show cause why he should not be disallowed such credit and where the credit has already been utilized, why the amount equivalent to such credit should not be recovered from him. Rule 57AH Recovery of credit wrongly taken : (1) Where the cenvat credit has been taken or utilized wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of Sections 11A, 11AA and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries. Rule 12 Recovery of cenvat credit wrongly taken : Where the cenvat credit has been taken or utilized wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of Sections 11A and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries. Section 11AA as it existed prior to 11-5-2001 : Interest on delayed payment of duty : Subject to the provisions contained in Section 11AB, where a persona chargeable with duty determined under sub-section (2) of Section 11A, fails to pay such duty within three months from, the date of such determina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay interest at such rate not blow eighteen percent, and not exceeding thirty-six percent, per annum, as is for the time being fixed by the Central Govt. by notification in the Official Gazette from the first day of the month succeeding the month in which the duty ought to have been paid under this Act or the rules made thereunder or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2) of Section 11A, till the date of payment of such duty. (2) For the removal of doubts, it is hereby declared that the provisions of sub-section (1) shall not apply to cases where the duty became payable before the date on which the Finance (No. 2) Bill, 1996 receives the assent of the President. Section 11AB after amendment : Interest on delayed payment of duty : (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person who is liable to pay the duty as determined under sub-section (2), or has paid the duty under sub-section (2B), of Section 11A, shall, in addition to the duty, be liable to pay interest at such rate not below ten per cent and not exceeding thirt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring which irregular availment of cenvat credit in case of appellant has been confirmed. One of the rules out of Rule 57-I Rule 57AH and Rule 12 held fort. The show cause notice also has cited all the rules. Commissioner has upheld the demand under these rules. The striking aspect of all the provisions of all these rules is that Rule provides for interest as determined under Section 11AA or Section 11AB as the case may be. While Rule 57-I was self contained and included proviso similar to Section 11A, subsequent amended rule viz. 57AH and Rule 12 invoke proviso to Section 11A in case demand arising out of fraud, suppression, collusion etc. As can be seen, the appellant s cases are covered throughout the period by the Rules and it is quite clear that the intention was to charge interest as applicable under Section 11AB for Cenvat credit availed wrongly prior to 11-5-2001 when Proviso to Rule 57-I or Section 11A was invoked. Section 6 of the General Clauses Act specifically provides that repealment of any act or regulation does not affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed or affect any investigation, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen they can be said to have not been covered by the provisions of interest and it would have created an additional liability/obligation retrospectively. In case of assessees where the demands have been confirmed involving proviso to Section 11A, it is a confirmed obligation since Section 11AB which requires to pay duty from the date on which it become due, was in existence, even prior to 11-5-2001 and continued to exist thereafter. Thus, no new interest liability is created and it will be wrong to say that the legislative intent was to extend benefit of non-payment of interest on the liabilities which had already incurred by them in terms of Section 11AB as it existed prior to 11-5-2001. Any other interpretation would mean that legislature wanted to reward the assessee in whose case, show cause notices were issued for the past 5 years since time is available for invoking extended period and where investigations could be in progress, the existing liability gets extinguished. In view of the above discussion, we feel that amendment of Section 11AB would not extinguish liability of all the assessees/manufacturers in whose case, demands arose for the period prior to 11-5-2001 because ..... X X X X Extracts X X X X X X X X Extracts X X X X
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