2008 (8) TMI 317

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..... or non-payment of duty by the due date as required under law, Section 11AB is clearly not applicable - interest is not demandable under any of the provisions available and relevant to the facts of the case. Therefore the demand of interest on this amount also cannot be upheld. – Further in respect of unutilized credit the interest is not payable if the credit has not been utilized, the demand for interest on this amount also has to be set aside.
Shri B.S.V. Murthy, Member (T) Shri P.M. Dave, Advocate, for the Appellant. Shri D.S. Negi, SDR, for the Respondent. [Order].- In this appeal the appellants are challenging the demand for interest confirmed by the Commissioner (Appeals) as detailed below:- (i) On the amount of central excise .....

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..... taken on the inputs contained in semi-finished goods destroyed in fire since the requirement of the Cenvat Credit Rules that the inputs should have been used in the manufacture has been fulfilled as per the decisions cited above. Therefore the question of demand of interest does not arise. As regards interest on the amount of Cenvat credit of Rs.19,06,198/- reversed by them on the inputs lying as such, he submits that Section 11AB is not at all applicable in this case. Section 11AB is applicable only where there is a short levy or ion-levy of duty of excise or where an assessee failed to pay the duty required to be paid by him before 5th of the next month. In their case what is required is reversal of Cenvat credit and therefore Section 11A .....

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..... the same financial year since the capital goods were destroyed in fire and became scrap in January i.e. in the same financial year. As per sub-rule A(5) of Rule 3, if the capital goods are cleared as waste and scrap the manufacturer is required to pay an amount equal to the duty eligible on transaction value and in this case the scrap was cleared on payment of duty applicable under transaction value thereby fulfilling the requirement of Cenvat Credit Rules. Summing up, he submits that there is nothing liable to be paid by them and they have fulfilled all the obligations required as per law. 3. Ld. SDR on behalf of the Revenue submits that the appellants took the 50% of the balance credit when the capital goods were no longer available in t .....

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