2009 (6) TMI 844

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.... This amount was sought to be recovered under Rule 57-I of the said Rules. The adjudicating authority also ordered recovery of interest on the above amount under Section 11AB of the Central Excise Act, 1944 read with Rule 57-I(5) of the aforesaid Rules. It also imposed a penalty of Rs. 1,33,700/- on the assessee under Rule 57-I(4) and Rule 173Q of the aforesaid Rules. A separate penalty of Rs. 20,000/- was imposed under Rule 209A on Kishore Joshi, the Chief Executive of the assessee. The assessee and their Chief Executive appealed to the Commissioner (Appeals) and the latter allowed those appeals by holding that, in the absence of statutory machinery for recovery of any amount of 8% of the price of exempted final product in terms of Rule 57....

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....No. 654/45/02-C.X., dated 19-8-2003 wherein similar cases covered by the Cenvat Credit Rules, 2002 were exempted and it was clarified, with reference to Explanation II to Rule 6 of the aforesaid Rules, that 8% of the price of the exempted goods payable by a manufacturer under Rule 6(3)(b) of the aforesaid Rules could be recovered under Rule 12 of the said Rules. The learned Counsel for the respondent submits that the above Explanation to Rule 6(3) of the Cenvat Credit Rules, 2002 had no retrospective effect so as to cover the instant case wherein an amount held to be payable under Rule 57CC(2) of the Central Excise Rules, 1944 is sought to be recovered under Rule 12 of the Cenvat Credit Rules, 2002. The learned Counsel, further, relies on t....

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....in relation to the manufacture of exempted final product, such availment of Cenvat Credit having been prohibited under Rule 6(1) of the said Rules. By virtue of Explanation II to Rule 6(3), Rule 12 could be employed for recovery of an amount from a manufacturer of dutiable and exempted final products in terms of Rule 6(3)(b). The Cenvat Credit Rules, 2002 were substituted for the Cenvat Credit Rules, 2001 which were substituted for the Modvat/Cenvat-related to provisions contained in Central Excise Rules, 1944. Rule 57-I of the 1944 Rules, embodied a recovery mechanism for Modvat/Cenvat credit wrongly availed by a manufacturer. However, under those rules, there was no provision for recovery of 8% of the price of exempted product payable ....