TaxTMI 
TaxTMI 
2017 (11) TMI 824
X X X X Extracts X X X X
X X X X Extracts X X X X
....g under Chapter 21 and 24 of Central Excise Tariff Act, 1985. With the introduction of Compounded Levy Scheme under Section 3A of Central Excise Act, 1944 on the said goods, the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 has been brought into force. The appellant w.e.f. 01.07.2008 had been discharging duty in terms of the said Rules read with Notification No. 42/2008-CE dated 01.07.2008.Alleging that even though the appellant had been debarred from taking cenvat credit in terms of Rule 15 of the said Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, but they have wrongly availed cenvat credit of Rs. 5,39,66,221/- during the period 01.07.2008 to 31.08.2009, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CENVAT Credit Rules, 2004 inasmuch as the present levy is under Section 3A of Central Excise Act, 1944, hence the recovery proceedings under other provisions of Central Excise Act and the Rules made there under is not applicable in view of the judgment of the Hon'ble Supreme Court in Hans Steel Rolling Mills Vs CCE, Chandigarh - 2011(265) ELT 321 (S.C.). Further, he has submitted that since there is no provision under the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 in view of the ratio laid down in their Shree Bhagwati Steel Rolling Mills Vs CCE - 2015 (326) ELT 209 (SC), therefore, recovery of interest on the wrong credit availed, interest under Rule 14 of CENVAT Credit Rules, 2004 or Section 11A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eturns. Hence, recovery of interest is unsustainable in law being barred by limitation. In support he has referred to the judgment of the Hon'ble Delhi High Court in the case of Hindustan Insecticides Ltd. Vs. CCE, LTU - 2013 (297) ELT 332(Del.) followed by this Tribunal in the case of G.P.Steel Industries Ltd. Vs.CCE, Rajkot vide Order No.A-10685-10696/2017 dt. 31.3.2017. Also, since the provision of the CENVAT Credit Rules, 2004 is not applicable to their case, therefore, imposition of penalty under Rule 15 of CENVAT Credit Rules, 2004 is bad in law. It is his further contention that Rule 17 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 cannot be attracted in the present case as the appella....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eversed, therefore, interest and penalty for wrong availment of credit is automatically applicable. He has further contended that the present issue is not demanding interest on late payment of excise duty under compounded levy scheme but incorrect availment of cenvat credit under the Cenvat credit Rules,2004, hence Rule 9 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is inapplicable. Referring to the judgment of Hon'ble Supreme Court in Ind Swift Laboratories Ltd.'s case (supra), the Ld. AR for the Revenue vehemently argued that Rule 14 of the CENVAT Credit Rules, 2004 specifically provides for recovery of interest when cenvat credit has been wrongly taken or utilized. This principle has been....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Collection of Duty) Rules, 2008, notified under Section 3A of Central Excise Act, 1944. But, since the credit has been availed in their books of accounts, therefore, interest is required to be discharged. 8. The appellant, on the other hand, argued that soon after introduction of the levy on their product, its viries was challenged before the Hon'ble Bombay High Court and for keeping proper account of the credit admissible, in the event they succeed before the Hon'ble Bombay High Court, the credit was availed by them in their books of accounts for record purposes only. No doubt the principle for recovery of interest, when credit has been availed but not utilized is settled by the judgment of the Hon'ble Supreme Court in the case of Ind S....