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TMI Blog2015 (1) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... o say the interest is liable to be paid and appellants have apparently paid the interest for delayed payment next month. At best it can be said that availment of CENVAT credit in the subsequent month is a procedural violation since strictly going by the law, credit could not have been used. - Utilization of credit allowed. As regards penalty, there is no doubt that there is a default in making payment on monthly basis. Further the benefit of BIFR decision also in my opinion is not applicable to the assessee. This is because while BIFR had allowed them to pay the principal in installment over a period of 7 years and had waived interest and penalty, the appellants have chosen to pay the entire amount and take the CENVAT credit back in 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as payable on irregular utilization of a credit of ₹ 44,78,549/- 2) The period of dispute was from October, 2003 to April, 2004. 3) The dispute is in regard to utilization of CENVAT credit earned for subsequent months for discharge of duty liability under Rule 8 of Central Excise Rules, 2002. The credits taken and used are detailed here (i) Credit earned in October, 2003 used for discharging part of liability of September, 2003 ..Rs. 22,06,621/- (ii) Credit earned in December, 2003 used for discharging part liability of November, 2003 ..Rs. 14,00,077/- (iii) Credit earned in April, 2004 used for discharging part liability of March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest are not warranted in view of the revival package sanctioned by Board for the Industrial and Financial Reconstruction vide its order dated 25.07.2008 under the provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 vide page 31 (v) clause of the BIFR order. 6) The Hon ble Tribunal vide Misc. Order Nos. 642 643/2011 dated 28.11.2011 dismissed the miscellaneous application filed by Revenue for dismissal of appeal and allowed the application filed by appellants for staying the operation of demand of interest on duty subject to deposit of ₹ 1 lakh towards penalty. In this regard kind observations of the Hon ble Tribunal (while dismissing the Misc. Petition of Revenue) in regard to the fact of pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponding extent in their Cenvat accounts - Equal amount of penalty imposed, is too harsh in view of peculiar facts of case Penalty reduced - Sections 11A and 11AC of Central Excise Act, 1944. 2008 (231) E.L.T. 349 (Tri.-Del.) Nehru Steels Vs. CCE, Kanpur Payment of duty from Cenvat a/c without having sufficient balance - Cenvat/Modvat Assessee not eligible for availing Cenvat credit for payment of duty during relevant period - Directed to pay duty from PLA and thereupon be eligible for Cenvat credit to corresponding amount in Cenvat account Rule 8 of Central Excise Rules, 2002. 9) The Hon ble High Court at Chennai had also held so in the following case that such process involves only account entry reversal and that suo motu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er kind reference is solicited to concluding paragraph 5.6. 12. I have considered the submissions made by the learned counsel. Learned AR reiterated the arguments that there was a default on the part of the appellant and the default was made good subsequently and therefore consequences have to be taken by the appellant. 13. In this case the default occurred during the year 2003-04. During the relevant period there was no statutory provision specifically providing that the CENVAT credit should not be used during the default period. Logically, the CENVAT credit which came into the account in a subsequent month could not have been used for demand of duty for the previous month since the inputs could not have been used for the production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be paid in cash and till the payment was made in cash, interest is liable to be paid is not correct. I also take note of the fact that even in terms of provisions of Rule 8(3), only when the default is more than one month, the prohibition of utilization of cenvat credit would arise. In this case on all the three occasions, the duty was paid in the next month and therefore the default does not appear to have travelled beyond one month. 14. Having regard to all these facts and circumstances, I do not consider that interest is payable by the appellant. As regards penalty, there is no doubt that there is a default in making payment on monthly basis. Further the benefit of BIFR decision also in my opinion is not applicable to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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