- (1.) This is an appeal under Section 35-G of the Central Excise Act, 1944 (hereinafter referred to as the "Act") arising from the order of the Tribunal dated 4-8-2009 in Central Excise Appeal No. E/2551 of 2007 raising following questions: (A) Whether, the Tribunal has committed a manifest error of law to direct the Original Authority "to verify as to whether credit was utilized and if not utilized the credit during the material period, no interest will be demanded", whereas the liability to pay interest under Section 11AB of the Central Excise Act, 1944 is automatic till the period the amount is not paid and it does not depend on non-utilization of amount kept/credit taken by manufacturer? (B) Whether the facts and circumstances of the case reduction in penalty under Rule 15 of the CENVAT Credit Rules, 2004 from Rs. 1,00,000/- to Rs. 10,000/- is legally permissible where the duty involved and confirmed was Rs. 9,31,360/- and the aforesaid Rules provides for levy of penalty not exceeding the duty or ten thousand rupees which ever is greater?
(2.) The brief facts giving rise to the present appeal are that the respondent-manufacturer (hereinafter referred to as "Assessee") was engaged in printing on steel sheets. Printed sheets were classifiable under sub-heading 7210.30 of the Schedule to the Central Excise Tariff Act, 1985. By notification No. 6/2002-C.E., dated 1-3-2002, as amended by notification No. 16/2004-C.E., dated 28-2-2004, the duty was reduced from 16% instead of 8% ad valorem. The Assessee, by mistake, paid the duty @ 16% instead of 8% ad valorem during the period 28-2-2004 to 18-3-2004. In this way, there was an excess payment of Rs. 9,31,360/-. The Assessee supplied the printed sheets to their sister unit, who initially availed credit of the excess duty paid. Subsequently, the sister unit reversed the excess duty paid by the Assessee on 31-1-2005 in their Cenvat account at the instance of their jurisdictional officer. The Assessee took suo motu credit of Rs. 9,31,360/- paid in excess in their Cenvat account, on 25-5-2005. A show cause notice dated 13-2-2006 was issued on the ground that Cenvat credit of Rs. 9,31,360/- has been wrongly taken and accordingly proposed to demand the Cenvat credit of Rs. 9,31,360/- along with interest and penalty. The adjudicating authority has confirmed the demand of entire amount of duty along with interest and also imposed penalty of Rs. 1 lac. The Commissioner (Appeals) upheld the adjudication order.
(3.) Being aggrieved by the order of the Commissioner (Appeals), the Assessee filed second appeal before the Tribunal along with stay application. It appears that in terms of the order of the Tribunal on the stay application, the Assessee has reversed the entire credit. Before the Tribunal, the Assessee contended that the entire credit has been reversed before its utilization and the said amount is still lying in their Cenvat account and a separate application was moved for the refund of the amount which has been paid in excess. The Tribunal by the impugned order has upheld the demand of duty which has been reversed by the Assessee in their Cenvat account and reduced the amount of penalty to Rs. 10,000/-. Regarding the demand of interest, the Tribunal directed the Original Authority to verify as to whether credit was utilized and if it has not been utilized during the material period, no interest will be demanded.;