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TMI Blog2013 (12) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... days’ time to return the amount to the respondents who had wrongly availed MODVAT credit on the HSD oil used as an input - If anyone who had repaid the amount wrongly availed within 30 days from the date on which Section 112 of the 2000 Act got the President’s assent, that assessee had not to pay any interest on the amount of duty availed by him wrongly - But those who had availed the MODVAT credit on the HSD oil used as an input and did not return the said amount even within 30 days from the date on which the President had given assent to the enactment of Section 112 of the 2000 Act, had to return the amount wrongfully retained by them with interest at the rate of 24% p.a - such a course, adopted by the Revenue for recovery of the amount which was legitimately claimed by the Revenue, cannot be said to be bad in law - the High Court committed an error by not considering the aforestated factors – Order set aside and decided in favour of Appellant. - Civil Appeal No. 5634 of 2008, C.A. No. 5635/2008, C.A. No. 5636/2008, C.A. No. 5922/2008,C.A. No. 6506/2008, C.A. No. 11175 of 2013 @ SLP (C) No. 28055 /2008, C.A. No. 6886/2008, C.A. No. 906/2009, C.A.No. 895/2009, C.A. No. 1296/2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable under Rule 57A and 57B of the Rules. 7. What is relevant here is that the respondent as well as other assessees-respondents, whose cases are being decided by this common judgment, had availed the MODVAT credit of the duty paid on the HSD Oil, which was used as an input even though it was not permissible in view of the aforestated Notification followed by the Trade Notice. So it is not in dispute that though MODVAT credit was not to be availed in respect of the duty paid on the HSD oil used as an input, all the assessees who are respondents, had availed the MODVAT credit. 8. In the aforestated circumstances, show cause notices had been issued to all the respondents calling upon them as to why the MODVAT credit availed by them during the period for which they were not entitled to such a credit, should not be withdrawn and why interest at the rate of 24% p.a. be not charged on the amount of credit already availed by them. 9. It is pertinent to note that in the meantime Section 112 of the 2000 Act had been enacted and by virtue of which, interest at the rate of 24% p.a. had to be paid on the MODVAT credit wrongfully availed by the respondents in respect of the duty paid on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the 16th day of March, 1995 and ending with the day, the Finance Act, 2000 receives the assent of the President, shall be deemed to be admissible. (2) Any action taken or anything done or purported to have been taken or done at any time during the said period under the Central Excise Act or any rules made thereunder to deny the credit of any duty in respect of high speed diesel oil, and also to disallow such credit to be utilised for payment of any kind of duty on any excisable goods shall be deemed to be, and to always have been, for all purposes, as validly and effectively taken or done, as if the provisions of sub-section (1) had been in force at all material times and, accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority,- (a) no suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for allowing the credit of the duty paid on high speed diesel oil and no enforcement shall be made by any court, tribunal or other authority of any decree or order allowing such credit of duty as if the provisions of sub-section (1) had been in force at all material times; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall pay the amount equivalent to the credit disallowed, if the credit had been utilised, or shall not utilised the credit thus disallowed. Explanation : where the service of the notice is stayed by an order of a court of law, the period of such stay shall be excluded from computing the aforesaid period of six months or five years, as the case may be. (2) If any inputs in respect of which credit has been taken are not fully accounted for as having been disposed of in the manner specified in this Section, the manufacturer shall upon a written demand being made by the Assistant Commissioner of Central Excise, pay the duty leviable on such inputs within three months from the date of receipt of the notice of demand. (3) Where a manufacturer or an assessee fails to pay the amount determined under sub rule (1) or sub rule (2) within three months from the date of receipt of demand notice, he shall pay, in addition to the amount so determined, interest at such rate, as may be fixed, by the Central Board of Excise and Customs under Section 11 AA of the Act, from the date immediately after the expiry of the said period of three months till the date of payment. (4) Where the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of credit disallowed. 14. The learned counsel appearing for the revenue had submitted that by virtue of the provisions of Section 112 of the 2000 Act, one has to ignore the provisions of Rule 57 (I) of the Rules, as Section 112 of the 2000 Act had been enacted as a one- time measure to see that all those who had wrongly availed the MODVAT credit on the duty paid on the HSD oil used as an input in their factories repay the amount wrongfully retained by them immediately. The learned counsel had discussed various provisions whereby the position with regard to the admissibility of the MODVAT credit on duty paid on the HSD oil used as an input had been changed from time to time in the past till the litigation which had been finally decided by this court. As there is no dispute with regard to the non-admissibility of the MODVAT credit on the HSD oil used as an input for the period commencing from 16.03.1995 till the date the 2000 Act received the President s assent, we need not discuss the relevant rules and notifications in pursuance of which the MODVAT credit in respect of the duty paid on the HSD oil as an input was not admissible. 15. The learned counsel had submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashing and setting aside the orders passed by the CESTAT whereby imposition of interest at the rate of 24% p.a. on the amount of the MODVAT credit availed on the use of the HSD oil as an input, for the period referred to hereinabove, was upheld. 20. The learned counsel had submitted that Section 112 of the 2000 Act cannot be read in isolation, but it must be read with the provisions of Rule 57 (I) of the Rules. According to them, in any case, before demanding interest from any assessee, first of all the final liability, i.e. the amount payable has to be ascertained and only upon ascertainment of the amount payable, interest can be calculated and demanded on the said amount. 21. It had also been submitted by the learned counsel appearing for the respondents that by virtue of the retrospective effect, liability of the respondents had been increased not only by not permitting to avail MODVAT credit on use of the HSD oil as an input for the period referred to hereinabove but also by imposition of interest @ 24% p.a. on the amount of the MODVAT credit availed on the HSD oil used as an input with effect from 30 days from the date on which the President had given assent to Section 112 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DVAT credit in respect of the HSD oil used as an input and those who had claimed the credit wrongfully, return the said amount within 30 days from the date the President gives assent to the 2000 Act. This clearly denotes that by virtue of the provisions of Section 112 of the 2000 Act, MODVAT credit availed on the HSD oil used as an input had not been withdrawn for the first time but it was declared that if anybody had availed MODVAT credit on the HSD oil used as an input, will have to return it within 30 days and in case the amount being not refunded within 30 days, the amount of the MODVAT credit wrongfully availed by the concerned assessee had to be returned with interest at the rate of 24% p.a. 26. The aforestated factual aspect would clarify that Section 112 of the 2000 Act is in fact not having any retrospective effect but it only enables the Government to get back the wrongly availed MODVAT credit on the HSD oil used as an input. 27. A somewhat similar issue had arisen before this Court in the case of Sangam Spinners Limited (supra) and after considering earlier Notifications issued by the Government, it had been held that Section 112 of the 2000 Act did not take away any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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