Cadbury India Ltd vs Commissioner Of Central Excise, Pune I

(Arising out Order-in-Appeal No. P-I/05/2005 dated 01.04.2005 passed by the Commissioner of Central Excise (Appeals), Pune)

For approval and signature: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S.Garg, Member (Judicial)

1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : Yes 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes

Cadbury India Ltd. Appellant

Vs.

Commissioner of Central Excise, Pune I Respondent

Appearance:

Shri R.S. Paranjape, CA for the appellant Shri Ajay Kumar, Jt. Comm (AR) for the respondent

CORAM:

Honble Shri P.K. Jain, Member (Technical) Honble Shri S. S. Garg, Member (Judicial)

Date of hearing : 08.09.2015 Date of decision : 14.09.2015

O R D E R No:..

Per: P.K. Jain:

The brief facts of the case are that the appellant was paying excise duty on fortnightly basis. For the payment relating to the fortnight 16.08.2000 to 31.08.2000, appellant was required to pay the duty on or before 05.09.2000. As per Rule 57AB(1)(b) as amended vide Notification 48/2000-CX (NT) dated 18.08.2000 the appellant was allowed to use the Cenvat credit only to the extent that such credit as available on the last date of the month for payment of duty relating to second fortnight of the month. Thus in effect as per the Rule they were allowed to utilise the Cenvat credit available as on 31.08.2000 for payment of duty for the second fortnight i.e. on or before 05.09.2000. However, appellant did not follow the said proviso/Rule but paid the duty utilising the Cenvat credit which came to be available to them during 01.09.2000 to 05.09.2000. The case of the Revenue is that the said amount is required to be paid by the appellant in cash and not from the credit availed during 01.09.2000 to 05.09.2000. The case was adjudicated by the original authority as also by first appellate authority. Aggrieved by the said order, appellant are before us.

2. Ld. counsel for the appellant submits the following case laws in support of his contention that all that is required is to demand the interest for the above said activity. * Hindalco Industries Ltd. 2014 (311) ELT 94 * CCE vs. Shyam Sel Ltd. 2009 (244) ELT 84 * CCE vs. Agni Steels Ltd. 2005 (188) ELT 35

3. Ld. AR took us through Rule 57AB and also the amendment made on 18.08.2000. It was submitted that even before the said amendment it was obvious that for payment of duty on particular fortnight the Cenvat credit available on the last date of that fortnight can only be utilised. However, the rules were not specific. In order to remove ambiguity the said amendment was carried out and after the said amendment there could be no doubt whatsoever that the appellant was required to utilise the Cenvat credit only up to the last day of the fortnight. He submitted that in view of the said position, appellant are required to pay the amount in cash.

4. We have considered the submission made by both sides.

5. We find the proviso to Rule 57AB read as under:

Provided that while paying duty in the manner specified under sub-rule (1) of rule 49 or sub-rule (1) of rule 173G, as the case may be, the CENVAT credit shall be utilized only to the extent such credit is available on the fifteenth day of a month for payment of duty relating to the first fortnight of the month, and the last day of a month for payment of duty relating to the second fortnight of the month or in case of a manufacturer availing exemption by notification based on value of clearances in a financial year, for payment of duty relating to the entire month. Thus it is very clear that with effect from 18.08.2000 the appellants could not have utilised the Cenvat credit available for the subsequent period for payment of duty of the earlier period.

6. We have gone through the judgments quoted by the ld. counsel. We find that in the case of CCE vs. Agni Steels Ltd. (supra), the Tribunal observed as under:-

3. We have carefully considered the submissions made by? both sides. As can be seen from the impugned order, the assessee had already earned the Cenvat credit prior to the Notification No. 48/2000-C.E. (N.T.), dated 18-8-2000 came into existence. Therefore, the Notification has got only prospective effect as held by the Commissioner (Appeals). The appellants have utilised the credit, which they have already earned for clearances made by them. Therefore, it cannot be held that utilisation of Cenvat credit by the assessee was incorrect and not in terms of law. The order passed by the Commissioner (Appeals) is just, legal and proper. There is no need to interfere with the same. There is no merit in this appeal and the same is rejected.

In the case of CCE vs. Shyam Sel Ltd. (supra), the Tribunal observed as under:-

2. We find that? the Rules were amended by Notification 48/2000-C.E. (N.T.) dated 18th August, 2000 which restricted utilization of credit to the amounts available only up to fifteenth day of a month and up to the last day of a month for paying duty for the first and second fortnights respectively. Such amendment is effective only from 18-8-2000 prospectively as has been held by the Tribunal earlier in the case of Commissioner of Central Excise, Calicut v. Agni Steels Ltd. - 2005 (188) E.L.T. 35 (Tri.-Bang.). Hence, such restriction cannot be applied in the instant case for duty payments which have been made prior to 18-8-2000. Accordingly, we hold that the order passed by the authorities below are legal and proper and the same do not require any interference. Consequently, the departments appeal is dismissed. In the case of Hindalco Industries Ltd. (supra), we find that the payment related to the fortnight i.e. 1.08.2000 to 15.08.2000 i.e. the fortnight was for the period prior to the amendment of the Rule 57AB, which is not the case here. The present case is relating to payment of duty relating to fortnight after the said Notification.

7. In view of the said position, we do not find any merit in the appeal filed by the appellant. Appeal is dismissed. The appellant is required to pay the amount confirmed in the original order in cash. Appellant will however, be free to take credit of the equal amount in their records for future clearances. Keeping in view the overall facts of the case, penalty imposed under Rule 173C(1) is set aside as the period pertains to immediately after the amendment in said rule.

(Pronounced in Court on .)

(S. S. Garg) (P.K. Jain) Member (Judicial) Member (Technical)

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