COMMISSIONER OF CENTRAL EXCISE Vs. MALWA INDUSTRIES LTD

JUDGEMENT

(1.) These two appeals [CEA No. 55 of 2004 - Commissioner, Central Excise Commisionerate V/s. M/s. Malwa Industries Ltd. and CEA No. 51 of 2006 - Commissioner of Central Excise Commissionerate V/s. M/s. Malwa Industries Ltd. filed by the revenue under Section 35H(1) of the Central Excise Act, 1944 (for brevity the Excise Act') are directed against the order dated 17-10-2004 [2004 (178) E.L.T. 783 (Tri.-Del.)] passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity the Tribunal'). The common issue raised in these appeals is whether credit on Basic Excise Duty (for brevity BED') can be utilised for payment of Additional Duty of Excise leviable under Additional Duty of Excise (Goods of Special importance) Act, 1957 (for brevity the 1957 Act'). However, the revenue has claimed that the following substantive questions of law would emerge from the order of the Tribunal :

(2.) Whether Additional duty of Excise (S.T.) is included in the expression any duty' mentioned in any duty of excise' whereas the provisions of erstwhile Rule 57AB(1)(b) C.E. Rules, 1944 provide that the CENVAT credit can be used for payment of any duty of excise"?

(3.) However, subsequently it was realized that as per the statutory provisions, the Cenvat credit could not be used for payment of duty' and the term duty' was limited to Basic Excise Duty (BED) and Special Excise Duty (SED) only. Accordingly the use of the said credit for payment of Additional Excise Duty (ST) (for short AED ST') was found to be irregular and therefore the rebate claims sanctioned earlier were considered erroneous. Accordingly, show cause notices were issued to the dealer-respondent directing them to show cause as to why the rebate claims amounting to Rs. 10,16,460/- which was erroneously sanctioned and paid be not recovered from them under Section 11A of the 1944 Act. During the period of April and May, 2001, the dealer-respondent had also utilised CENVAT credit amounting to Rs. 84,20,670/- for payment of Additional Excise Duty (ST). It was alleged that as per the statutory provisions, the CENVAT credit could be used for payment of duty' and the said term was limited to mean BED and SED only and the use of said credit for payment of AED (ST) was irregular. Accordingly a show cause notice was issued requiring respondent to show cause as to why (i) AED (ST) amounting to Rs. 84,20,670/- paid by the dealer-respondent through CENVAT credit be not recovered and (ii) penal action should not be taken against them under Rule 173Q of the Rules, 1944.