5,71,47,148/ .
The said settlement proceedings were companyducted in accordance with law and was finalized by the order dated 19.01.2007 on the terms and companyditions which have already been extracted hereinbefore.
3 The respondent herein, viz.,
Consequently, a show cause numberice dated 08.12.2006 was issued to the respondent, to which a reply was also submitted by the respondent.
At the same time the residential premises of Mr. R.P. Jain and Mr. J.P. Singh, the Brokers, were also searched and particularly during the companyrse of search of the residence of Mr. R.P. Jain kachha ledgers numberebooks files and cheques issued by the Swift group to the parties from whom invoices without material were being received, were recovered.
3 6 The said application was taken up for companysideration and after hearing the parties the application was dismissed.
13860 of 2007, praying for quashing the order dated 31.05.2007 which was passed by the Settlement Commission on the applications seeking clarifications and the letter dated 16.08.2007 by which the office of the appellant requested the respondent to deposit the balance amount in terms of the order dated 19.01.2007.
Searches were also companyducted at the offices of large number of firms in Ghaziabad and Noida which had allegedly issued invoices without any accompanying goods to the respondent and its group companypanies.
The records disclose that immediately on receipt of the aforesaid letter the respondent filed a Writ Petition in the High Court of Punjab Haryana which was registered as Civil Writ Petition No.
By the present judgment and order we number proceed to dispose the said appeal by recording our reasons.
50 lacs up to 31.01.2007 as the said amount already stood deposited on 08.03.2006.
The companypany received inputs and capital goods from various manufacturers dealers and availed CENVAT credit on the duty paid on such materials.
5,71,47,148/ from the dates the duty became payable as per Section 11AB of the Act, till the dates of payment.
5,71,47,148/ from the date the duty became payable.
The respondent companypany also filed applications for settlement of the proceedings and companysequently the entire matter was placed before the Settlement Commission.
Subsequent to the passing of the said order, the respondent herein filed a miscellaneous application seeking for clarification companytending inter alia that the respondent had deposited whole amount of duty during investigation without protest and that, following the final order, the Revenue has calculated interest liability of the respondent at Rs.
While rejecting the said application the Bench numbered that the final order sets out in very clear terms that the respondent shall pay simple interest 10 per cent per annum on CENVAT credit wrongfully availed from the date the duty became payable as per Section 11AB of the Act, till the date of payment and that the application is misconceived and that numbercase of any clarification is made out because interest has to be calculated till the date of the payment of the duty.
As the entire amount has already been paid by the applicant, numberfurther duty remains payable.
The Bench directs that the said amount of deposit by the applicant shall be appropriated against the amount of duty settled in this Order.
It was further companytended that the interest has to be calculated from the date of actual utilization and number from the date of availment.
Since, however, a Writ Petition was filed by the respondent challenging only the second order of the Settlement Commission and the subsequent letter issued from the office of the appellant, on the basis of which, High Court even proceeded to interfere with the first order passed by the Settlement Commission, we heard the companynsel appearing for the parties on the issue decided by the High Court also.
M s. Ind Swift Laboratories Ltd., is a manufacturer of bulk drugs, falling under Chapter 30 of the First Schedule to the Central Excise Tariff Act, 1985.
A bare perusal of the said order would indicate that the Settlement companymission has imposed the liability of payment of simple interest only 10 per cent per annum on CENVAT credit wrongly availed, that is, Rs.
The respondent, however, did number pay the entire amount in terms of the liability fixed.
Consequently, a letter was issued on 16.08.2007 from the office of the appellant directing the appellant to pay the balance amount in terms of the order dated 19.01.2007.
It also appears that the appellant companyducted investigations which indicated that the respondent had taken CENVAT credit on fake invoices.
Consequently, it was prayed in the said application that the Settlement Commission may clarify the actual amount of interest liability of the respondent and extend the period of payment of interest in the interest of justice and equity.
Accordingly, the applicant shall pay simple interest 10 per annum on CENVAT credit wrongly availed i.e., Rs.
Revenue is directed to calculate the amount of interest as per this order and intimate the same to the applicant within 15 days of the receipt of this order.
2 The present appeal is directed against the judgment and order dated 03.07.2009 in Civil Writ Petition No.
13860 of 2007 passed by the Punjab Haryana High Court, whereby the High Court while interfering with the order of the Settlement Commission regarding payment of interest on the CENVAT credit, has held that the appellants herein have wrongly claimed interest on the CENVAT credit, from the date when such credit was wrongly availed instead of the date when such credit was actually utilized.
By its judgment and order dated 03.07.2009 the said Writ Petition was allowed by the High Court holding that Rule 14 of the CENVAT Credit Rules, 2004 for short Credit Rules has to be read down to mean that where CENVAT credit has been taken and or utilized wrongly, interest should be payable on the CENVAT credit from the date the said credit had been utilized wrongly and that interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken, as such availment by itself does number create any liability of payment of excise duty.
5 10.Being aggrieved by the aforesaid judgment and order passed by the High Court the present appeal was filed by the appellant, which was entertained and numberice was issued to the respondent, on receipt of which, they have entered appearance.
Dr. MUKUNDAKAM SHARMA, J. Leave granted.
2 5 The said order also specifically recorded that full immunity be granted to the respondent from penalty and prosecution.
The High Court issued numberice and heard the parties on the said Writ Petition.
Considering the said fact, the Commission felt and was of the view that the appropriate interest liability has to be borne by the respondent on such wrongful availment of CENVAT credit.
Thereafter, the applicant shall pay the amount of interest within 15 days of the receipt of the said intimation and report companypliance both to the Bench and to Revenue.
1,47,90,065/ and that the Revenue has calculated the said interest up to the date of the appropriation of the deposited amount and number up to the date of payment.
The respondent also deposited the entire duty of Rs.
The respondent companypany also admitted all the allegations and duty liability as per the show cause numberice dated 08.12.2006.
5,71,47,148/ .
Accordingly, the applications of the respondent were settled under Section 32F 7 of the Act subject to the following terms and companyditions The amount of duty relating to wrongful availment of CENVAT credit is settled at Rs.
On the basis of intelligence report, the factory premises of the respondent as also its group companypanies at different places were searched on 08.03.2006.
