2015 (9) TMI 351

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....agi and T.M.Venkat Reddy, learned Central Government Counsel appearing for respondents. 3. The short point that arises for consideration in these writ petitions relates to interpretation of Rule 8(3A) of Central Excise Rules, 2002. FACTUAL MATRIX: Re.W.P.No.1438/2015: 4. Petitioner had filed quarterly returns in ER.3 indicating the value of clearance, central excise duty payable and duty actually paid in cash and what is available by way of debit in the CENVAT credit with the petitioner for the period from January 2011 to March 2011 and indicating the vendor that duty payable was Rs. 6,79,334/- and the duty was shown as having been paid by way of debit in CENVAT credit Rs. 2,60,423/- and by way of cash Rs. 4,18,911/-. Petitioner stated ....

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....riod. As such, revenue contended that petitioner is required to pay excise duty for each consignment at the time of removal, without utilizing the CENVAT credit till the outstanding amount including the interest is paid. It is also indicated in the impugned notices that for the months of May 2014, June 2014 and July 2014 petitioner has utilized CENVAT credit for payment of central excise duty for the respective months, without paying the duty in cash on consignment basis in contravention of the provisions of Rule 8(3A) of Central Excise Rules, 2002. It is also indicated in the said impugned notices that central excise duty has been paid beyond the prescribed period. As such, petitioner has been directed to pay the defaulted amount of Rs. 8,....

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....CENVAT credit would be treated as consignments having been removed without utilizing CENVAT credit and thereby petitioners would be liable to pay the excise duty by cash including the interest from the date of removal of such goods. 8. In order to appreciate the contentions raised by the respective learned Advocates, it would be necessary to extract Rule 8(3A) of Central Excise Rules, 2002, which Rule has been relied upon by both the parties. Same reads as under:- "8. Manner of Payment.- (1) xxxx (2) xxxx (3) xxxx 3A. 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 Rul....

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....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." A bare reading of Rule 14 would indicate that where the assessee has taken or utilized wrongly or has been erroneously refunded the CENVAT credit, then authorities would be entitled to recover the same from the manufacturer or the provider of the output service and provisions of Sections 11A and 11AB of Central Excise Act or Sections 73 and 75 of the Finance Act would apply mutatis mutandis for effecting such recoveries. Thus, before initiating recovery proceedings, it would be incumbent upon the authorities to issue notice to the petitioners under Section 11A of the Ac....