TaxTMI 
TaxTMI 
2015 (5) TMI 375
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....alling under Chapter Heading No.8439. The assessee is also registered under Chapter V of the Finance Act of 1994 in respect of certain services rendered by it. The assessee has availed Cenvat credit of the specified duties paid on inputs, capital goods and input services as per the provisions of Central Credit Rules, 2004 (hereinafter referred to as '2004 Rules'). 3. During the scrutiny of the record, it was noticed by the Revenue that the assessee has taken suo moto credit of Rs. 5,35,500/- vide credit entry Nos.20 and 21 dated 15th January, 2008. It was subsequently debited on 31st December, 2008 vide debit entry Nos.43 and 44. It is the case of the Revenue that the assessee had suo moto availed the credit which was not permissible in accordance with law. Since the assessee failed to pay interest of Rs. 66,945/-, a show cause notice was issued to the assessee calling upon them to show cause as to why : "(i) the inadmissible suo-moto credit amounting to Rs. 5,35,500/- availed by them should not be disallowed and recovered from them under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Sec.11A of the Central Excise Act, 1944; (ii) the amount of....
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....n assessee. The learned senior counsel submits that if a strict and liberal interpretation is to be applied then, the words "and the provisions of Sections 11A and 11AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries" cannot be ignored. The learned senior counsel submits that as such, while a recovery under Rule 14 is to be made, it can only be made by reading the provisions of Section 11 and Section 11B to be a part of the said provision. The learned senior counsel submits that by applying the principle of incorporation by reference, the provisions of Section 11A and Section 11B of the Central Excise Act will have to be read into Rule 14. The learned senior counsel submits that if Sections 11A and 11B are taken into consideration, the position that would emerge is that a recovery can be made only if the amount to be paid by an assessee is determined by the authority. The learned senior counsel submits that since in the present case there is no such determination and direction to make the payment, there would be no compliance with Section 11A. The learned senior counsel further submits that even the perusal of S....
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....not utilizing it, the provisions of Rule 14 could be invoked or not. While interpreting the said provisions, the Lordships of the Apex Court observed thus in paragraphs 15, 16 and 17 : "15. In order to appreciate the findings recorded by the High Court by way of reading down the provision of Rule 14, we deem it appropriate to extract the said Rule at this stage which is as follows : "Rule 14. 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 11A and 11AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries." 16. A bare reading of the said Rule would indicate that the manufacturer or the provider of the output service becomes liable to pay interest along with the duty where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded and that in the case of the aforesaid nature the provision of Section 11AB would apply for effecting such recove....
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....hough correctly taken at that point of time, on the basis of the judgment of the Punjab & Haryana High Court, would no longer be correct in view of the subsequent judgment of the Apex Court in the case of Union of India v. Ind-Swift Laboratories Ltd. reported in 2011 (265) ELT 3(S.C.). 14. In so far as the issue raised by Mr. Sridharan, learned senior counsel with regard to the error committed by the authority in not construing Rule 3 of the 2004 Rules correctly is concerned, there is no finding by the learned Tribunal to that effect in the impugned order and therefore, it would not be appropriate for us to go into that question. In any case, that question pertains to decision on the factual position as obtained in the matter and therefore, it will be beyond our jurisdiction to decide a matter which is basically based on factual situation. We, therefore, find that it will be appropriate if the said issue is decided by the learned Tribunal. 15. In so far as the judgment of the Karnataka High Court is concerned, it appears that the said judgment is delivered by the Karnataka High Court on the facts of the said case. It would be relevant from the facts as stated in the said judg....