2015 (5) TMI 911

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....te Tribunal, Principal Bench, Court-1, New Delhi and Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, Court-III, respectively. The appellant is a manufacturer of processed cotton, man-made and hosiery fabrics and was paying Central Excise duty after availing deemed credit as per rates fixed under notification issued under Section 11 of the CENVAT Credit Rules. The Deputy Commissioner, Central Excise, Division-V, Faridabad, vide order dated 31.10.2002, ordered forfeiture of the facility of deferred payment of duty on fortnightly basis and directed the appellant to pay central excise duty on consignment basis for a period of two months from the date of communication of the order. During the period of forfeiture i.e. 01.02....

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....hy deemed credit of Rs. 19,82,917/- availed/utilised during February, 2002 to March, 2002 and Rs. 23,96,731/- availed/utilised from 25.09.2002 to 24.11.2002, for payment of basic and additional excise duty may not be disallowed. The appellant was also called upon to show cause as to why interest should not be charged under Section 11AB of the Central Excise Act, 1944 and penalty be not imposed under Rule 25 of the Central Excise No.20 Rule 2002 and Central Excise Rules, 2002, for contravention of Rule 8. The appellant submitted a joint reply to the two show cause notices, denying any violation etc. The adjudicating authority rejected the appellant's contentions, confirmed demand of Rs. 19,82,917/- after disallowing deemed credit for the....

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.... rectification application. Counsel for the appellant submits that the impugned order has been passed without considering written submissions filed by the appellant. The learned CESTAT had not adjudicated the legal pleas raised by the appellant nor has it referred to any provision of law or judgment. The learned Tribunal has failed to appreciate budget changes of 2001-02 that deemed credit can be taken by an independent processor only at the time of clearance except in case of goods exported under bonds. The learned CESTAT has failed to take note of the fact that in the case of deemed credit, the amount of credit is one of the ingredients for arriving at the duty payable by the assessee as an integral part of the assessment but in the ca....

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....re were defaults in payment of duty in respect of several fortnights leading to issue of orders dated 31.1.2002 and 20.09.2002. It is not disputed that the respondents have utilised the credit in violation of debarment orders issued under the Central Excise Rules. The original authority has only debarred the credit for two months in each case. We find that normally the deemed credit was available at the time of clearance of the final products. In other words, the credit which was deferred by the original authority is deemed to have been restored after two months. Therefore, the demand of duty on the ground that there was restriction in use of the credit for two months would lead to double payment of duty by the respondents. Therefore, we al....