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TMI Blog2014 (2) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... taken or utilized wrongly or erroneously refunded. Therefore, interest on irregular credit arises from the date of taking of such credit. Whether the extended period of time could be invoked - Held that:- they had declared the taking of credit in ER-1 returns. We have also perused the ER-1 Returns available on record. It is seen that the details of the documents on the strength of which credit has been taken is reflected in the said returns. However, it is nowhere declared that the goods on which credit has been taken is not intended for use in or in relation to the manufacture of excisable goods. Arrangements which the appellant had with VCL for the storage of the goods and its return as and when needed was never disclosed to the department. In these circumstances, the invocation of extended period of time for denial of credit is clearly sustainable in law. Whether the appellant is liable to penalty under Rule 15 or under 26 of the CENVAT Credit Rules, 2004 - Held that:- appellant even though had taken the credit wrongly, did not utilize the said credit at any point of time. This clearly shows that the appellant had no intention to evade any duty. Therefore, in the absence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was adjudicated ad duty demand was confirmed by denying the Central Excise credit of Rs. 1,61,04,675/- and interest on the said credit wrongly taken was also confirmed. A penalty of equivalent amount was also imposed on the appellant under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of the said Act. In addition, a fine of Rs. 1 crore was imposed on the goods i.e., base oil on the ground that the same was liable to confiscation and hence fine is imposable under Section 34 of the Central Excise Act, 1944. Aggrieved by the same, the appellant is before us. 3. The learned Counsel for the appellant submits that in as much as the appellant had reversed the credit taken at the time of clearance of the base oil to M/s. VCL and Ultraplus Lube Pvt. Ltd., the question of reversal of credit once again does not arise and, therefore the demand is not sustainable. He further argues that the entire demand is time barred in as much as the show-cause notice was issued only in June 2008 whereas the credit was taken during 2003-04. In as much as the demand itself is time barred, the appellant is not liable to pay interest thereon nor is he liable to pay any penalty. It is furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, taking of credit by the appellant on the base oil is ab initio void and, therefore, the demand for the same as confirmed in the impugned order is sustainable. In as much as the appellant has suppressed the fact of taking wrong credit, the appellant is liable to penalty under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC and also under Rule 26 of the Central Excise Rules, 2002. The goods on which CENVAT credit was wrongly taken is liable to confiscation and hence imposition of fine in lieu of confiscation is justified. Accordingly, it was pleaded that impugned order was sustainable in law. 5. We have carefully considered the submissions made by both the sides. 5.1 The undisputed fact in the present case is that the appellant had obtained duty paid base oil form VCL for storage purposes and took credit of the duty paid under the provisions of CENVAT Credit Rules, 2002/2004. The credit so taken was reversed as and when the base oil was returned to VCL or other consignees as directed by VCL. Therefore, the base oil on which credit was taken was never intended for any use by the appellant in or in relation to the manufacture of any dutiable of excisable goods. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of taking of the credit till the date of reversal of the credit. In view of the above decision by the hon'ble apex court, the ratio of which is applicable to the present case, it becomes evident that the appellant is liable to discharge interest liability on the CENAT credit wrongly taken from the date of taking of the CENVAT credit till the date of reversal. The reliance placed by the appellant on the decision of the Hon'ble Karnataka High Court in the case of Bill Forge Pvt. ltd. (supra) and the other decision will not apply to the facts of the present case. In the case of Bill Forge Pvt. Ltd. (supra) the appellant therein took the credit and also reversed the credit within the same month i.e. before any liability to pay any duty arose. It was in that context the Hon'ble High Court held that if a credit has been taken but reversed before any liability to pay duty arose then no interest liability would accrue. Those are not the facts obtaining in the present case. It is not the case of the appellant that between the date of taking the credit and the date of reversal when the base oil was cleared, liability to pay duty did not arise at all. In fact the clearance has been sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,- (a) for the words "taken or utilized wrongly", the words "taken and utilized wrongly" shall be substituted; This amendment rule make it absolute clear that the amendment is with effect from 17.03.2004 (sic) and not before. In view of the express provisions in the Amendment Rules, the argument of the appellant that amendment being in the nature of substitution would have retrospective effect cannot be accepted. It is a trite law that every statutory provision is prospective only unless it is explicitly provided that it is retrospective in nature and the legislature provides for such retrospective operation. In the present case, no such retrospectivity has been provided by the legislature in respect of Notification 18/2012-CE (N.T.) dated 17.03.2012 and, therefore, the argument of the Counsel in this regard and the decisions relied upon in support of the same cannot be accepted. 5.5 The next issue is whether the appellant is liable to penalty under Rule 15 or under 26 of the CENVAT Credit Rules, 2004. It is a fact that, the appellant even though had taken the credit wrongly, did not utilize the said credit at any point of time. This clearly shows that the appellant had no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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