Kesar Ispat Ltd Vs Commissioner of Central Excie & CGST (CESTAT Delhi)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, dismissed the appeal filed by the assessee and upheld the recovery of ₹7.20 lakh in central excise duty, together with the findings that the appeal before the Commissioner (Appeals) was not maintainable and that the assessee had wrongly utilized ineligible CENVAT credit for payment of duty. The Tribunal, however, observed that the assessee would be at liberty to pursue an appropriate remedy regarding CENVAT credit that accumulated after the disputed period.
The dispute arose after an audit conducted between 20 March 2018 and 26 March 2018 found that the assessee had a central excise duty liability of ₹7.20 lakh for June 2017. The assessee paid ₹1,41,749 along with interest on 15 August 2017, while the remaining ₹5,78,251 was discharged by debiting the service tax credit register. The department found that this credit was not available as on 30 June 2017 and therefore had been wrongly availed and utilized in violation of the CENVAT Credit Rules, 2004. Treating the unpaid duty as recoverable under Rule 8(4) of the Central Excise Rules, 2002 read with Section 11 of the Central Excise Act, 1944, the department initiated recovery proceedings without issuing a show cause notice. The assessee challenged the recovery before the Commissioner (Appeals), whose decision was carried before the Tribunal.
