Hari Krishna Steel Corporation Vs. Cce - Court Judgment

Excerpt:

.....cannot be demanded/recovered. however, on going through the section 11ab of the central excise act 1944, i find that it does not distinguish the fact whether the amount lying with the assessee has been utilized by it or not and therefore, lower adjudicating authority has rightly demanded recovery of interest.further, the learned joint cdr reads out sub-para 1 of rule 57ah, which reads as follows: where the cenvat credit has been taken or utilized wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of sections 11a, 11aa, and 11ab of the act shall apply mutatis mutandis for effecting such recoveries. there is no denial that there are provision for recovery of interest. but in the subject case, the reversal of credit has taken place much before the date of issue of show cause notice and hence, in my view taking into account cegat's order, referred to by the learned advocate, there is no case for charging interest.5. in view of the above, i set aside the order of the commissioner (appeals) and also of the original authority, in so far as charging of interest is concerned 6. appeal allowed accordingly with consequential relief to the.....

Judgment:

1. This is a case, in which, the appellants had reversed the cenvat credit on 19th January, 2002 and the show cause notice was issued on 3rd June, 2002. The learned Advocate brings to my notice in the case of Emmellen Biotech v. CCE Mumbai-VII, which reads as follows: The credit wrongly taken was repaid within eight months before the issue of notice. Even if the appellant has not done so, debiting the wrong credit on its own, and only paid it after notice was issued and adjudicated, but if so within three months of determination of duty, it is still not required to pay the interest. The payment of interest in the present case therefore does not arise.

2. The learned Advocate informs that the case is identical, hence the impugned order has to be set aside with regard to interest demanded thereunder.

3. The learned Joint CDR reiterates the ratio adopted in the order-in-appeal. The order-in-appeal reads as follows: As regards the recovery of interest under Section 11AB, appellant has contended that this is not sustainable inasmuchas there is no enjoyment of such amount and same was not utilised and it was laying with the government account and hence, interest cannot be demanded/recovered. However, on going through the Section 11AB of the Central Excise Act 1944, I find that it does not distinguish the fact whether the amount lying with the assessee has been utilized by it or not and therefore, lower adjudicating authority has rightly demanded recovery of interest.

Further, the learned Joint CDR reads out sub-para 1 of Rule 57AH, which reads as follows: Where the CENVAT credit has been taken or utilized wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of Sections 11A, 11AA, and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries.

There is no denial that there are provision for recovery of interest. But in the subject case, the reversal of credit has taken place much before the date of issue of show cause notice and hence, in my view taking into account CEGAT's order, referred to by the learned Advocate, there is no case for charging interest.

5. In view of the above, I set aside the order of the Commissioner (appeals) and also of the original authority, in so far as charging of interest is concerned 6. Appeal allowed accordingly with consequential relief to the appellants.