Cenvat credit utilisation upheld for duty payment after Rule 57AB amendment, with the dispute treated as revenue neutral.

Credit utilisation for payment of duty in the first fortnight of August 2000 was upheld because the amendment to Rule 57AB took effect on 18-8-2000 and the Board's circular of 25-8-2000 clarified the position. As the duty payment and debit entry were both made on 19-8-2000, the credit remained available for use. The appellate authority also treated the matter as revenue neutral, noting that even if payment had been made through PLA, the credit would have continued to be available for the next fortnight. On that basis, the demand and penalty challenge failed.

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Issues: Whether the assessee was entitled to utilise the credit for payment of duty for the first fortnight of August 2000 in view of the amendment to Rule 57AB and whether the demand and penalty were sustainable.

Analysis: The amendment to Rule 57AB came into force on 18-8-2000 and the Board's circular dated 25-8-2000 clarified the position. The duty payment was made on 19-8-2000, and the debit entry was also made on that date. The Commissioner (Appeals) found that, even if the duty had been paid from PLA, the credit would have remained available for the next fortnight, making the exercise revenue neutral. That view was accepted as correct.

Conclusion: The revenue's challenge failed and the assessee's utilisation of credit was upheld.

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