2019 (2) TMI 940

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....The Plain Lateral Pipes and Tubes were being classified by the appellant under chapter 39 whereas Drip Irrigation Pipes were being classified under heading 8424900. The goods falling under chapter 89 were being cleared by them without payment of duty under the claim of exemption in terms of Notification No.12/2012-CE, entry 242. Further, as the appellant was availing Cenvat credit of duty paid on the common Cenvatable inputs, they were reversing an amount equivalent to 6% of value of all exempted goods in terms of the provisions of Rule 6(3) of Cenvat Credit Rules. The pipes classifiable under chapter 39 were being cleared by them on payment of duty by utilizing the Cenvat credit. 2. As per audit objection, it was observed that certain i....

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.... Plain Lateral Pipes was dropped by him. However, in respect of the irrigation pipes, the Additional Commissioner observed that even though the appellant was paying 6% of the value of the said goods at the time of clearance, they were not entitled to the credit availed in respect of the inputs which were exclusively used in the manufacture of the said products. He accordingly confirmed the demand of duty of Rs. 5,51,588.00 and appropriated the amount of Rs. 4,52,905.00 already deposited by the appellant. He also confirmed the interest in terms of Rule 14 of Central Excise Rules, 2004 and imposed penalty of identical amount upon the appellant. 4. The said order of the Additional Commissioner was appealed against by the Revenue as also by ....

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....s. Admittedly the Plain Lateral Pipes and Tubes were being cleared by the appellant on payment of duty by treating the same as classifiable under chapter 39. As such irrespective of the fact as to whether the said pipes were classifiable under chapter 39 or chapter 84, we are of the view that the credit so availed by the assessee and utilized for payment of duty on the said goods cannot be disallowed to them. The appellants have strongly contended that the duty paid by them on the said pipes was much more than the credit availed by them. Their customers were also not availing the benefit of Cenvat credit of duty paid by the appellant. In such a scenario, it stands strongly contended that they were not benefited by availing the credit and pa....

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....lant immediately reversed the said disputed credit, before issuance of the show cause notice itself. The said deposit is not being contested by the appellant. Their only contest is to confirmation of interest on the ground that the credit wrongly availed by them was lying unutilized in their accounts and as such there could be no occasion for the Revenue to confirm the interest. For the above proposition they have relied upon the Karnataka High Court's decision in the case of C.C.E. v. Bill Forge (P) Ltd. [2012 (279) ELT 209 (Kar.)] as also many other decisions. We note that there is no dispute about the fact that the wrongly availed credit was not being used by the assessee inasmuch as there was sufficient balance in their credit accoun....