TaxTMI 
TaxTMI 
2019 (4) TMI 1686
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....g the same does not amount to taking credit ? (C) Whether the amendment to Rule 14 of Cenvat Credit Rules, 2004 vide Notification No.18/2012-CE(NT) dated 17.03.2012 clarifies the position for the period prior to the amendment or is only prospective in operation ? (D) Whether, under the facts and circumstances, the Appellate Tribunal is correct and justified in applying the decision of the Apex Court in Ind-Swift Laboratories to the present facts to confirm the demand of interest ? (E) Whether, under the facts and circumstances, the Appellate Tribunal is correct and justified in imposing penalty on the Appellants under Rule 15 of Cenvat Credit Rules, 2004 ? 2. By consent of the parties, the Appeal is heard finally. 3. Some of the relevant facts for the purpose of deciding this appeal, are as under : (a) The Appellant is holding the Central Excise registration for manufacture of medicaments, falling under Chapter Heading 3004 of the First Schedule to the Central Excise Tariff Act, 1985. It was the case of the Appellant that it was also engaged in manufacture of medicaments containing ethanol (alcohol), which falls outside the purview of Central Excise Tariff in view of Chap....
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....ed mistake and reversed the cenvat credit. The Appellant, however, contended that no interest was payable by the Appellant since the credit had been reversed prior to utilization of the cenvat credit availed of by the Appellant. (f) The Respondent issued a show cause notice dated 30 January 2009 upon the Appellant, proposing to recover an amount of 1,92,86,034/-, Rs. alleged to be the cenvat credit incorrectly taken on common inputs used in the manufacture of non-excisable medicaments and appropriate the amounts debited in the Cenvat Credit Account. The said Demand Notice was issued under Rule 14 of the Cenvat Credit Rules, 2004, read with Section 11A of the Central Excise Act, 1944. By the said show cause notice, the Respondent also proposed to recover interest amounting to 14,62,497/-, Rs. on the alleged inadmissible cenvat credit of Rs. 1,92,86,034/- under the provisions of Rule 14 of the Cenvat Credit Rules, 2004, read with Section 11A of the Central Excise Act, 1944. (g) The Appellant replied to the said Show Cause Notice vide letter dated 20 July 2009 and contended that the cenvat credit was not availed of by the Appellant with an intention to evade any duty. The Appellan....
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....nterest under Section 14 of the Cenvat Credit Rules, 2004, as well as imposition of penalty under Rule 15 of the Cenvat Credit Rules, 2004. He submits that under Rule 14, interest could be charged by the Respondent to the Appellant only if the Appellant would have utilized the credit incorrectly. He submits that none of these conditions were satisfied in this case. 6. It is submitted that the Appellant was not aware as to how much quantity of which common inputs would be used in the manufacture of non-excisable medicaments out of the total quantity of common inputs purchased. The Appellant was taking Cenvat Credit only on that quantity of common inputs which were used in the manufacture of dutiable medicaments and were not taking credit of excise duty paid on common inputs to the extent used in the manufacture of non-excisable medicaments. 7. It is submitted that though the Appellant had taken Cenvat Credit of excise duty paid on the entire quantity of common inputs at the time of receipt of these inputs in its factory, the Appellant had not utilized the said Cenvat Credit in manufacture of non-excisable goods. No sooner the objection was raised by the Respondent during the cours....
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....wo Central Excise Appeals on the substantial questions of law, which questions are identical in the facts of this case as well. 11. Ms. Asha Dessai, learned Senior Central Govt. Standing Counsel for the Respondent, on the other hand, invited our attention to the findings of facts rendered by the learned Commissioner Customs and Central Excise, Goa and also the findings rendered by the CESTAT which are impugned by the Appellant in this Appeal. She invited our attention to the substantial questions of law formulated by the Appellant in this Appeal. She submits that in the facts of this case, unamended Rule 14 of the Cenvat Credit Rules, 2004 is applicable. She submits that the Hon'ble Supreme Court in the case of Union of India vs. Ind-Swift Laboratories Ltd. (supra), has considered the same Rule 14 and has held that an attempt by the High Court to read down provision by substituting the word "or" by word "and", so as to give relief to the assessee is found to be erroneous. 12. The learned counsel strongly placed reliance on paragraphs 15 to 20 of the said Judgment and would submit that the Hon'ble Supreme Court has categorically held that under Rule 14, the manufacturer or....
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....ned Counsel for the Appellant is concerned, she distinguishes the said Judgment on the ground that the facts before the Hon'ble Supreme Court in the said Judgment were totally different. 16. In so far as the orders passed by the Division Bench of this Court in the case of Hindustan Petroleum Corporation Ltd. vs. Commissioner of CGST & Central Excise, Navi Mumbai Commissionerate, (supra) and in the case of Finolax Industries Limited vs. The Commissioner of Central Excise (supra), relied upon by the learned Counsel for the Appellant is concerned, it is submitted by the learned Counsel for the Revenue that the Judgment of this Court in the case of Commissioner of Central Excise vs. GL & V India Pvt. Ltd.(supra) following the Judgment of the Hon'ble Supreme Court in the case of Union of India vs. Ind-Swift Laboratories Ltd. (supra) and distinguishing the Judgment of Madras High Court in the case of Commissioner of C.Ex., Madurai vs. Strategic Engineering (P) Ltd. (supra) was not brought to the notice of the Division Bench while admitting those two appeals in the cases of Hindustan Petroleum Corporation Ltd. vs. Commissioner of CGST & Central Excise, Navi Mumbai Commissionerate....
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....pondent that the Appellant, vide its letter dated 27 May 2008, informed the Respondent that it had reversed the cenvat credit. 20. The authorised representative of the Appellant appeared before the learned Commissioner Customs and Central Excise, Goa in response to the summons issued by the Respondent and made a statement that the Appellant had availed of the credit of inputs on non-excisable produts and had reversed the same amounting to Rs. 1,63,51,408/- , Education Cess Rs. 3,27,034/- , AED Rs. 24,86,387/-, High Education Cess Rs. 1,21,205/-, thus totalling to Rs. 1,92,86,034/- as pointed out by the Central Excise Audit. The said representative Shri Sreekumar Nair confirmed that the inputs, on which the credit was reversed, were exclusively used for the manufacture of nonexcisable products. The Appellant admitted that only on pointing out these facts during the course of audit, the Appellant reversed the cenvat credit. 21. Explanation to Rule 8 of the Central Excise Rules, 2002 clearly provides that the expression 'duty' or 'duty of excise ', shall include the amount payable in terms of the Cenvat Rules. In our view, the learned Commissioner Customs and Central....
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....ras High Court in the case of Commissioner of C.Ex., Madurai vs. Strategic Engineering (P) Ltd. (supra). The Judgment of the Hon'ble Supreme Court in the case of Union of India vs. Ind-Swift Laboratories Ltd. (supra) and the Judgment of the Division Bench of this Court in the case of Commissioner of Central Excise vs. GL & V India Pvt. Ltd.(supra) squarely apply to the facts of this case. We are respectfully bound by the said Judgments. 24. The Appellant in the present case was fully aware that the Appellant was manufacturing not only excisable goods, but also non-excisable goods but availed of the Cenvat credit for the entire inputs required to be used for not only excisable goods, but also for non-excisable goods at the threshold and did not reverse the Cenvat credit taken by it, though it had used the inputs also for nonexcisable goods. The Appellant reversed the Cenvat credit only after the Audit Department of the Respondent brought these facts to the notice of the Appellant. 25. In our view, Rule 14 of the Cenvat Credit Rules, thus, was clearly attracted to the facts of this case during the relevant financial years which were subject-matter of this proceeding. In our vie....
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....at as it may, the Judgment delivered by this Court int the case of in the case of Commissioner of Central Excise vs. GL & V India Pvt. Ltd.(supra), is the Judgment rendered after adverting to the Judgment of the Hon'ble Supreme Court in the case of Union of India vs. Ind-Swift Laboratories Ltd. (supra) applies to the facts of this case and is binding on this Court. 29. In our view, the Commissioner Customs and Central Excise, Goa was, thus, right in directing the Appellant to pay interest in the sum of 14,62,497/- on the wrongly availed Rs. Cenvat credit of Rs. 1,92,86,034/- in terms of Rule 14 of the Cenvat Credit Rules, 2004, read with Section 11AB of the Central Excise Act, 1944. The learned Commissioner Customs and Central Excise was also right in imposing the penalty of Rs. 50,000/- upon the Appellant under the provisions of Rule 15 of the Cenvat Credit Rules, 2004 in the facts and circumstances of this case. 30. The CESTAT rightly did not find any infirmity with the orders passed by the Commissioner Customs and Central Excise, Goa and has rightly rejected the Appeal preferred by the Appellant under Section 35(1) of the Central Excise Act, 1944. In the facts and circumst....