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TMI Blog2024 (2) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... utilized the entire amount of Cenvat Credit lying in their Cenvat Credit account and thereafter, balance amount was paid through PLA and accordingly, claimed the refund of such amount of the duty. Further, it is seen that the appellant have not availed the Cenvat Credit on furnace oil under bonafide belief that the same is not available, but the learned Commissioner has drawn the conclusion that the Cenvat Credit was not availed with intention to claim excess refund. The learned Commissioner failed to appreciate that had there been the balance in their Cenvat Credit account, the appellant could not have paid the duty through PLA. The learned Commissioner has also wrongly interpreted the meaning of the expression Cenvat Credit available to the appellant on the last day of month used in the Notification No. 56/2002-CE. In this regard, it is to be noted that when the manufacturer receive the inputs/capital goods, subject to fulfillment of other conditions, the Cenvat Credit pertain to the said inputs/capital goods would accrue to them but would not automatically be available in the Cenvat Register, but when the manufacturer took the Cenvat Credit in the Cenvat Register, at that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby the learned Commissioner has confirmed the demand of Rs.41,71,424/- of erroneously availed refund under Section 11A of the Central Excise Act, 1944 (hereinafter referred to as the Act ) along with interest under Section 11AB of the Act and also imposed equivalent penalty under Section 11AC of the Act; however, the learned Commissioner has dropped the demand of Rs.45,72,156/- under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Section 11A of the Act and also did not impose the penalty under Rule 15(2) of the Cenvat Credit Rules, 2004. 2. Briefly stated facts of the case are that the appellant are holding Central Excise Registration and are engaged in the manufacture of P P Medicines falling under Tariff Heading 30049099 and 30039090 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and are availing the benefit of exemption under Notification No. 56/2002-CE dated 14.11.2002. As per Rule 2(k) of the Cenvat Credit Rules, 2004, Cenvat Credit was admissible to the appellant on their inputs namely furnace oil. However, it was noticed that during the period from April 2005 to March 2009, the appellant did not take/avail Cenvat Credit on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the present appeal by the appellant against the confirmation of demand and penalty. 3. Heard both the parties and perused the records. 4.1 The learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed without properly appreciating the facts and the law and binding judicial precedents. 4.2 She further submits that the appellant did not avail Cenvat Credit on furnace oil under bonafide belief that the same is not available. Whereas, the appellant has been availing entire Cenvat Credit on other inputs and input service, but during the disputed period, they did not avail Cenvat Credit on furnace oil, which cannot establish that there is an intention to claim excess refund. 4.3 She further submits that the learned Commissioner ought to have understood that as there was no Cenvat Credit balance, as it was not availed, the appellant had to pay the duty in cash and thus availed the option of refund of such paid duty in PLA. The learned Commissioner also ought to understand that had been balance, why the appellant would use the working capital and pay the duty in PLA if the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing the refund claim and being no balance, the duty was paid by PLA and on audit observation later on the credit was availed after three and half years, hence the question of suppression of facts does not arise. She further submits that when the credit was availed in that month, the same was adjusted while paying the duty through PLA and hence, the whole scenario in the case is revenue neutral. 5. On the other hand, the learned DR for the Revenue reiterates the findings of the impugned order and submits that the appellant have not strictly complied with the conditions of the exemption Notification No. 56/2002-CE dated 14.11.2002. He further submits that the appellant is supposed to follow the procedure as prescribed in the exemption Notification which is strictly applicable to them. He also submits that the appellant did not avail the credit intentionally and paid the duty through PLA and thereafter claimed the refund of the same, which is against the conditions of the exempted Notification. He further submits that it is a settled law that the exemption Notification should be interpreted strictly and the burden of proving applicability would be on the appellant to show their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the appellant on the last day of month used in the Notification No. 56/2002-CE. In this regard, it is to be noted that when the manufacturer receive the inputs/capital goods, subject to fulfillment of other conditions, the Cenvat Credit pertain to the said inputs/capital goods would accrue to them but would not automatically be available in the Cenvat Register, but when the manufacturer took the Cenvat Credit in the Cenvat Register, at that time it can be said that the credit is available to the appellant. As per the Notification, the manufacturer should utilize the Cenvat Credit available and lying in their Cenvat Credit account on the last day of the month. It clearly means that whatever is the balance lying in the Cenvat Credit account in respect of the credit taken, during the relevant month and thus available for the utilization, should be utilized but the learned Commissioner wrongly interpreted and held that even if, the Cenvat Credit in respect of some raw material is not taken in the Cenvat Register for any reason, such Cenvat Credit should also be taken into consideration as available Cenvat Credit. Here, it is pertinent to mention that para 1A of the said Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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