2019 (4) TMI 1457

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....,17,44,316/- and Rs. 7,97,82,109/- against the appellant along with interest thereon, under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944 and Section 11AB of the Act respectively. The Commissioner has also imposed penalty of Rs. 19,17,14, 316/- upon the appellant under Section 11AC of the Central Excise Act. 2. The facts in brief are : (i) Additional Duty of Excise ("AED") is payable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 on inputs used in the manufacture of nylon tyre cord fabrics and dipped nylon tyre cord fabrics. Cenvat credit could be availed of such duty, until April 1, 2002, for payment of AED only as per Notification No.....

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....Section 88 of the Finance (No.2) Act 2004 was amended by including Sub-section (5) providing that the credit earned prior to April 1, 2000, which was utilized for payment of BED, shall have to be paid back in 36 installments along with interest @13% and prescribing the method of such recovery. The appellant thereafter paid back the sum of Rs. 19,17,44,316/- in instalments with interest from July 2005 onwards. (vii) Issue of duty (AED) on, inter alia, dipped nylon tyre cord fabrics used as intermediate product in manufacture of tyres, a long standing dispute between the Revenue and tyre manufacturers, including the appellant, was resolved by the Supreme Court through its decisions in CCE Vs MRF Limited, 2005 (180) ELT 145 (SC) and C....

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....ly credited and utilised for payment of cenvat duty of tyres/tubes/flaps for the month of February, 2008, which duty amount, therefore, remained unpaid and was recoverable from the appellant. The proceedings under the show cause notice resulted in the impugned order. 3. Heard both sides and perused the appeal records. 4. The Ld. Sr. Advocate appearing on behalf of the appellant contended that the issue involved is fully covered in favour of the appellant by the decisions of the Tribunal in CCE Vs CEAT Ltd, 2010 (254) ELT 349(T), as affirmed by Hon'ble Bombay High Court in CCE Vs. CEAT Ltd., 2013 (288) ELT 525 (Bom) and Hon'ble Kerala High Court in Commr. of C.Ex, Cus & S. Tax Vs. Apollo Tyres Ltd., 2016 (333) ELT 10 (Ker). 5.On beh....

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....ed prior to 1-42000. Since the Finance Act, 2004 prohibited use of AED(GSI) for payment of BED, the credit balance of AED(GSI) would remain undisturbed in its account. During July, 2005 to June, 2006, the assessee had paid an amount of Rs. 65,54,373/- every month from AED(GSI) and later discharged the same liability by payment of duty from PLA. We find that credit is intended to be spent only to pay duty. The department had not recognized debits from AED(GSI) as payment of BED. Therefore, such debits cannot be held to have affected the balance of AED(GSI) in the accounts of the assessee. Therefore, once the appellant discharged the duty liability on tyres by debiting PLA, the appellant's account stood credited with the debits initially made....