TaxTMI 
TaxTMI 
TaxTMI 
2009 (11) TMI 284
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....station cheques. Those cheques were dishonoured. The amount, which fell due by 5th February, 2005, was eventually paid by the petitioner through account current. Nearly three years thereafter, respondent No. 1 issued notice dated 1-5-2009 to the petitioner, wherein the latter was called upon to pay a sum of Rs. 1,63,24,762/- and interest thereon for the period from 1-6-2006 to 14-6-2006, within ten days of receipt of the said letter. The petitioner vide its letter dated 6-5-2009, replied to the said demand by stating that during the period between 1-6-2006 and 14-6-2006, it discharged the duty liability from the Cenvat account in view of availability of adequate Cenvat credit and that no reasons were mentioned in the letter of respondent No. 1 for making the said payment. In response to the said letter, respondent No. 1 addressed letter dated 14-5-2009, wherein it was inter alia mentioned that the duty liable from January, 2005 and in respect of which outstation cheques were issued by the petitioner and were bounced, was paid only on 15-6-2006 and that with effect from 1-6-2006, Rule 8 of the Rules was amended under which it is provided that if default in payment of duty continues ....
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....diction of this Court under Article 226 of the Constitution and that on the facts of the case, sub-rule (3A) of Rule 8 of the Rules, as amended with effect from 1-6-2006, is applicable. In reply to the petitioner's averment that under Section 11(A)of the Act, the normal period of limitation for recovery of duty, which is not paid or not levied or erroneously refunded is one year and that it is only if the duty was not paid or not levied or erroneously refunded on account of willful mis­statement or suppression of facts or contravention of any of the provisions of the Act or the Rules that the period of five years limitation for recovery is available, it has been stated that Section 11(A) of the Act is not attracted when action for violation of sub-rule (3A) of Rule 8 is initiated and that it is only the provisions of Section 11, which are applicable to such situations. The respondents also joined issue on the petitioner's contention that in view of denial of opportunity to the petitioner as envisaged in Section 11(A) of the Act it was entitled to bypass the statutory remedy in order to invoke the jurisdiction of this Court by stating that in the light of the stand taken by them....
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....resolve this controversy, the provisions of Sections 11 and 11(A) and sub-rule (3A) of Rule 8 need to be considered. For better appreciation, they are reproduced hereunder: "Section 11. Recovery of sums due to Government. - In respect of duty and any other sums of any kind payable to the Central Government under any of the provisions of this Act or of the rules made thereunder [including the amount required to be paid to the credit of the Central Government under Section 11D], the officer empowered by the [Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963)] to levy such duty or require the payment of such sums may deduct the amount so payable from any money owing to the person from whom such sums may be recoverable or due which may be in his hands or under his disposal or control, or may recover the amount by attachment and sale of excisable goods belonging to such person; and if the amount payable is not so recovered, he may prepare a certificate signed by him specifying the amount due from the person liable to pay the same and send it to the Collector of the district in which such person resides or conducts his business and....
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....he words "five years" were substituted." Sub-rule (3A) of Rule 8 - If the assessee defaults in payment of duty beyond thirty days from the due date, as prescribed in sub-rule (1), then notwithstanding anything contained in said sub-rule (1) and sub-rule (4) of Rule 3 of Cenvat Credit Rules, 2004, the assessee shall, pay excise duty for each consignment at the time of removal, without utilizing the Cenvat credit till the date the assessee pays the outstanding amount including interest thereon; and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow." 9. A plain reading of Sections 11 and 11(A) would reveal that the provisions of Section 11 are attracted where duty and any other sums are payable to the Central Government under any of the provisions of the Act or Rules made thereunder and the officer empowered in this behalf is entitled to recover such duty through one of the following modes, namely; (i) by deduction of the amount so payable from any money owed to the person from whom such sums may be recoverable or due which may be in his hands or under h....
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....dit Rules, 2004 (for short, "the 2004 Rules"). Rule 14 of the said Rules reads as under: "Recovery of Cenvat credit wrongly taken or erroneously refunded. - Where the Cenvat credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of Sections 11-A and 11-AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries." 13. The admitted facts of this case show that the dispute pertains to the entitlement of the petitioner to avail Cenvat credit during the period when duty was due and payable by it. It is not a case where the respondents are seeking to recover the duty, payment of which was defaulted by the petitioner. But, this is a case where the respondents alleged that by operation of sub-rule (3A) of Rule 8, which was amended with effect from 1-6-2006, the petitioner was not entitled to avail Cenvat credit during the period of default. Thus, in substance, the dispute relates to the petitioner's eligibility to avail Cenvat credit during the period of default, namely, between 1-....