TaxTMI 
TaxTMI 
2011 (2) TMI 6
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.... the date when such credit was wrongly availed instead of the date when such credit was actually utilized. The High Court has further held that the appellants are not entitled to claim interest on the amount of Rs. 50 lacs up to 31.01.2007 as the said amount already stood deposited on 08.03.2006. 3. The respondent herein, viz., M/s. Ind-Swift Laboratories Ltd., is a manufacturer of bulk drugs, falling under Chapter 30 of the First Schedule to the Central Excise Tariff Act, 1985. The company received inputs and capital goods from various manufacturers/dealers and availed CENVAT credit on the duty paid on such materials. On the basis of intelligence report, the factory premises of the respondent as also its group companies at different places were searched on 08.03.2006. Searches were also conducted at the offices of large number of firms in Ghaziabad and Noida which had allegedly issued invoices without any accompanying goods to the respondent and its group companies. At the same time the residential premises of Mr. R.P. Jain and Mr. J.P. Singh, the Brokers, were also searched and particularly during the course of search of the residence of Mr. R.P. Jain kachha ledgers/noteb....
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.... 23(a)(ii) of the show cause notice is disallowed. (b) Immunity from interest in excess of 10% simple interest per annum is granted. Accordingly, the applicant shall pay simple interest @ 10 % per annum on CENVAT credit wrongly availed (i.e. Rs. 5,71,47,148/-) from the dates the duty became payable as per Section 11AB of the Act, till the dates of payment. Revenue is directed to calculate the amount of interest as per this order and intimate the same to the applicant within 15 days of the receipt of this order. Thereafter, the applicant shall pay the amount of interest within 15 days of the receipt of the said intimation and report compliance both to the Bench and to Revenue." 5. The said order also specifically recorded that full immunity be granted to the respondent from penalty and prosecution. Subsequent to the passing of the said order, the respondent herein filed a miscellaneous application seeking for clarification contending inter alia that the respondent had deposited whole amount of duty during investigation without protest and that, following the final order, the Revenue has calculated interest liability of the respondent at Rs. 1,47,90,065/- and th....
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....t before it through the Settlement Application. Section 32M of the Central Excise Act, 1944 bars the Commission from re-opening its final order. Hence, the final order already passed in the matter was conclusive as to the matters stated therein and the same cannot be re-opened for the purpose of deciding the said point raised subsequently." 7. The respondent, however, did not pay the entire amount in terms of the liability fixed. Consequently, a letter was issued on 16.08.2007 from the office of the appellant directing the appellant to pay the balance amount in terms of the order dated 19.01.2007. 8. The records disclose that immediately on receipt of the aforesaid letter the respondent filed a Writ Petition in the High Court of Punjab and Haryana which was registered as Civil Writ Petition No. 13860 of 2007, praying for quashing the order dated 31.05.2007 which was passed by the Settlement Commission on the applications seeking clarifications and the letter dated 16.08.2007 by which the office of the appellant requested the respondent to deposit the balance amount in terms of the order dated 19.01.2007. 9. The High Court issued notice and heard the parties on the sai....
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....was the highest in terms of the Section11 AB of the Act. Besides, the allegations made in the show cause notice were admitted by the respondent which, therefore, establishes that the respondent had taken wrongful CENVAT credit from the year 2001 to 31.03.2006 and the payment has been made only on 22.02.2006 and on five different dates in March, 2006 and on 20.11.2006, which indicates that the respondent had the benefit of availing the large amount of CENVAT credit to which they were otherwise not entitled to. 13. The order of the Settlement Commission also indicates that full immunities were granted to the respondent from penalty and prosecution. The aforesaid order was not challenged by the respondent in any forum and, therefore, it became final and conclusive in terms of Section 32M of the Act, which states that every order of settlement passed under sub-Section 7 of Section 32F would be conclusive as to the matters stated therein subject to the condition that when a settlement order is obtained by fraud or misrepresentation of fact, such an order would be void. According to the said provisions, no matter covered by such order could be reopened in any proceeding under the Cent....
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....to hold that interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as "and" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "OR" in between the expressions Taken' Or utilized wrongly' or Has been erroneously refunded' as the word "and". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with inte....
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....zeal of going wayward. Yet in spite of this, if the impugned legislation cannot be saved the courts shall not hesitate to strike it down. Similarly, for upholding any provision, if it could be saved by reading it down, it should be done, unless plain words are so clear to be in defiance of the Constitution. These interpretations spring out because of concern of the courts to salvage a legislation to achieve its objective and not to let it fall merely because of a possible ingenious interpretation. The words are not static but dynamic. This infuses fertility in the field of interpretation. This equally helps to save an Act but also the cause of attack on the Act. Here the courts have to play a cautious role of weeding out the wild from the crop, of course, without infringing the Constitution. For doing this, the courts have taken help from the preamble, Objects, the scheme of the Act, its historical background, the purpose for enacting such a provision, the mischief, if any which existed, which is sought to be eliminated .................... ........................ .................... ......................... ............................ This principle of reading down, h....