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TMI Blog2015 (2) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Section 11AB and for this purpose, the relevant date would be 10/09/04. This relevant date is obviously for the purpose of counting limitation period for the issue of show cause notice for recovery under Section 11A (1) not for counting the period for levy of interest. The interest under Rule 12 of Cenvat Credit Rules, 2002 would be leviable under Section 11AB and would start from 1st day of the month succeeding the month in which the credit was wrongly utilised for payment of BED and SED. The provisions of Section 88 of Finance Act, 2004 were amended by adding sub-Section (5) and sub-Section (6) by Section 124 of the Finance Act, 2005. Sub-Section (5) of the Finance Act, 2005 starts with the words notwithstanding anything contained in sub-Section (4) of Section 88 and prescribes a procedure for payment of the wrongly utilised AED (GSI) credit pertaining to period prior to 01/04/2000 in 36 instalments starting from July, 2005. Clause (V) of sub-Section (5) provides that the amount of interest on the amount of credit utilised for paying Cenvat duty shall be @ 13% per annum for the period beginning on and from the day when each time the amount of credit was so utilised a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03, by amendment to Rule 3 (6) of Cenvat Credit Rules, 2002, utilisation of AED (GSI) credit for payment of basic excise duty or special excise duty on the final product, was permitted, but this provision did not specify the cut of date i.e. the AED (GSI) credit accrued upto which date prior to the date of amendment could be utilised for payment of Basic Excise Duty and Special Excise Duty. Immediately after the amendment to Rule 3 (6) of the Cenvat Credit Rules, 2002 appellant utilised the AED (GSI) credit of ₹ 13.27 crores out of total AED (GSI) credit of ₹ 15.43 crores lying with them for payment of Basic Excise Duty and Special Excise Duty on the tyres. The credit utilised also included the credit of ₹ 8,71,12,812/- which had accrued during period prior to 01/04/2000. In 2004, Section 88 of the Finance Act, 2004 amended the Rul3 3 (6) of the Cenvat Credit Rules, 2002, retrospectively to provide that only the AED (GSI) credit accrued after 01/4/2000 could be utilised for payment of Basic Excise Duty and Special Excise Duty on the finished products and not the credit accrued during the period prior 01/04/2000. Sub-Section (4) of Section 88 provided for recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is credit to the extent of ₹ 8,71,12,812/- by the appellant for payment of Basic Excise Duty and Special Excise Duty on the tyres is wrong. Both the sides also agree that the Appellant had reversed this credit in December, 2004. However, the dispute is only as to whether interest under Section 11AB as ordered by the Commissioner would be chargeable or the interest liability is to be determined in terms of Clause (V) of Section 88 (4) of the Finance Act, 2004, introduced by Section 124 of the Finance Act, 2005. 5. On the question of levy of interest under Section 11AB on the wrong utilisation of AED (GSI) credit, Shri B.L. Narasimhan, Advocate, the learned Counsel for the Appellant, pleaded that when this credit had been utilised during 2003 after amendment Rule 3 (6), the utilisation was in terms of the provisions of Rule 3 (6) of Cenvat Credit Rules, 2002, as amended by the Central Government, that it is only by Section 88 of Finance Act, 2004 that a restriction was put with retrospective effect that AED (GSI) credit accrued during the period prior to 01/04/2000 could not be used for payment of Basic Excise Duty and Special Excise Duty and as such the AED (GSI) credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Act, 2004 is not correct. 6. Shri Pramod Kumar, the learned Jt. CDR, defending the Commissioners order with regard to levy of interest, pleaded that the provisions of Section 88 of the Finance Act, 2004 had been amended by adding sub-Section (5) and sub-Section (6) only by Section 124 of the Finance Act, 2005 w.e.f. 10/09/04, and this amending provision is not retrospective, that sub-Section (4) of the Section 88 of the Finance Act, 2004 provided for recovery of the wrongly utilised AED (GSI) credit in terms of the provisions of Cenvat Credit Rules, 2002 relating to recovery of wrongly taken/utilised credit alongwith interest, and that since the appellant had paid the entire amount in December 2004, itself it is the provisions of Section 88 (4) of the Finance Act, 2004 which would apply and not the provisions of Section 124 of the Finance Act, 2005. He also pleaded that the provisions of Section 124 of the Finance Act, 2005 prescribing mode of recovery of the wrongly utilised AED (GSI) credit in 36 instalment was subject to a procedure being followed in this regard as prescribed in this Section and since the appellant had not followed that procedure, the provisions of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for levy of interest. The interest under Rule 12 of Cenvat Credit Rules, 2002 would be leviable under Section 11AB and would start from 1st day of the month succeeding the month in which the credit was wrongly utilised for payment of BED and SED. 10. The provisions of Section 88 of Finance Act, 2004 were amended by adding sub-Section (5) and sub-Section (6) by Section 124 of the Finance Act, 2005. Sub-Section (5) of the Finance Act, 2005 starts with the words notwithstanding anything contained in sub-Section (4) of Section 88 and prescribes a procedure for payment of the wrongly utilised AED (GSI) credit pertaining to period prior to 01/04/2000 in 36 instalments starting from July, 2005. Clause (V) of sub-Section (5) provides that the amount of interest on the amount of credit utilised for paying Cenvat duty shall be @ 13% per annum for the period beginning on and from the day when each time the amount of credit was so utilised and ending on the 10th day of September, 2004. Though, sub-Section (5) added to Section 88 of the Finance Act, 2004 by Section 124 of the Finance Act, 2005 is a non-obstinate provision and would override the provisions of sub-Section (4) of Section 88 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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