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TMI Blog2011 (2) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... tempt of the High Court to read down the provision by way of substituting the word "OR" by an "and" so as to give relief to the assessee is found to be erroneous. In that regard the submission of the counsel for the appellant is well-founded that once the said credit is taken the beneficiary is at liberty to utilize the same, immediately thereafter, subject to the Credit rules. - . In the present case the order of the Settlement Commission clearly indicates that the said order, particularly, with regard to the imposition of simple interest @ 10 per cent per annum was passed in accordance with the provisions of Rule 14 but the High Court wrongly interpreted the said Rule and thereby arrived at an erroneous finding. - Civil Appeal No. 1976 of 2011, SLP(c) No. 5169 of 2010 - - - Dated:- 21-2-2011 - Mukundakam Sharma and Anil R. Dave, JJ Ms. Biswajeet Bhattacharya, Additional Solicitor-General of India, (Ms. Shipra Ghose and B. Krishna Prasad, Advocates, with him) for the appellants. Balbir Singh, Rupender Sinhmar, Abhishek Singh Beghel and Rajesh Kumar, Advocates, for the respondent. JUDGMENT Mukundakam Sharma, J 1. Leave granted. 2. The present appeal is direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent also deposited the entire duty of Rs.5,71,47,148/-. Since conditions/parameters for the admission of a case prescribed under Section 32E(1) of the Central Excise Act, 1944 [for short "the Act"] were fulfilled and complied with, the application of the respondent for settlement was entertained and the same was proceeded with in terms of Section 32F(1) of the Act. After considering the records and hearing the parties the Commission came to the findings that while the wrongful CENVAT credit was taken from the year 2001 to 31.03.2006, the payments refunds have been made on 22.02.2006 and on five different dates in March, 2006 and on 20.11.2006 and, therefore, the respondent had the benefit of availing the large amount of CENVAT credit to which they were not entitled. Considering the said fact, the Commission felt and was of the view that the appropriate interest liability has to be borne by the respondent on such wrongful availment of CENVAT credit. Accordingly, the applications of the respondent were settled under Section 32F(7) of the Act subject to the following terms and conditions:- "(a) The amount of duty relating to wrongful availment of CENVAT credit is settled at Rs.5,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 11AB of the Act, till the date of payment and that the application is misconceived and that no case of any clarification is made out because interest has to be calculated till the date of the payment of the duty. It was also held that the interest is also payable with reference to the date of availment of CENVAT credit and not from the date of utilization of a part of the balance of such credit. The Commission held that such an issue was never raised before the Settlement Commission at any earlier stage. The Commission while rejecting the application held as follows:- "The said show cause notice vide Para 23 thereof proposes to demand the CENVAT credit availed fraudulently by the applicant and not the amount of CENVAT utilized by the applicant. As such, it naturally follows that the interest is also payable with reference to the date of availment of CENVAT credit and not from the date of utilization of a part of balance of such credit. In any case, this issue was not raised in the application of settlement or at the time of settlement. In a query from the Bench, Id. Advocate also not raising this issue during settlement proceedings. As such, the Bench finds no justific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rieved by the aforesaid judgment and order passed by the High Court the present appeal was filed by the appellant, which was entertained and notice was issued to the respondent, on receipt of which, they have entered appearance. Counsel appearing for the parties were heard at length when the matter was listed for final arguments. By the present judgment and order we now proceed to dispose the said appeal by recording our reasons. 11. The facts delineated hereinabove make it crystal clear that the respondent accepted all the allegations raised in the show cause notice and also the duty liability under the said show cause notice dated 08.12.2006. They also deposited the entire duty of Rs.5,71,47,148/- prior to the issuance of the show cause notice and, therefore, they requested for settlement of the proceedings in terms of Section 32E read with Section 32F of the Act. The said settlement proceedings were conducted in accordance with law and was finalized by the order dated 19.01.2007 on the terms and conditions which have already been extracted hereinbefore. 12. A bare perusal of the said order would indicate that the Settlement commission has imposed the liability of payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Rule at this stage which is as follows: "Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded:- Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of Sections 11A and 11AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries." 16. A bare reading of the said Rule would indicate that the manufacturer or the provider of the output service becomes liable to pay interest along with the duty where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded and that in the case of the aforesaid nature the provision of Section 11AB would apply for effecting such recovery. 17. We have very carefully read the impugned judgment and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kind of judicial legislation. It is also held by this Court that the Rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. In this connection we may appropriately refer to the decision of this Court in Calcutta Gujarati Education Society and Another v. Calcutta Municipal Corporation and Others reported in (2003) 10 SCC 533 in which reference was made at Para 35 to the following observations of this Court in the case of B.R. Enterprises v. State of U.P. and Others reported in (1999) 9 SCC 700:- "81............... It is also well settled that first attempt should be made by the courts to uphold the charged provision and not to invalidate it merely because one of the possible interpretations leads to such a result, howsoever attractive it may be. Thus, where there are two possible interpretations, one invalidating the law and the other upholding, the latter should be adopted. For this, the courts have been endeavouring, sometimes to give restrictive or expansive meaning keeping in view the nature of legislation, maybe beneficial, penal or fiscal etc. Cumulatively it is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency." 20. Therefore, the attempt of the High Court to read down the provision by way of substituting the word "OR" by an "and" so as to give relief to the assessee is found to be erroneous. In that regard the submission of the counsel for the appellant is well-founded that once the said credit is taken the beneficiary is at liberty to utilize the same, immediately thereafter, subject to the Credit rules. 21. An order passed by the Settlement Commission could be interfered with only if the said order is found to be contrary to any provisions of the Act. So far findings of the fact recorded by Commission or question of facts are concerned, the same is not open for examination either by the High Court or by the Supreme Court. In the present case the order of the Settlement Commission clearly indicates that the said order, particularly, with regard to the imposition of simple interest @ 10 per cent per annum was passed in accordance with the provisions of Rule 14 but the High Court wrongly interpreted the said Rule and thereby arrived at an erroneous finding. 22. So far as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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