JUDGMENT

Manisha Batra, J.

CM-6820-CII-2017

For the reasons mentioned in the application, the same is allowed and the delay of 180 days in re-filing the appeal is condoned.

CM-6819-CII-2017

The application is allowed, as prayed for subject to just exceptions.

Main Case

The present appeal has been filed under Section 35-G of the CENTRAL EXCISE ACT , 1944 (for short 'the Act, 1944') against the order dated 12.08.2015 (Annexure A-3) passed by Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter to be mentioned as 'the Tribunal') in Excise Appeal No.E/108/2007.

2. The brief matrix of the case is given hereunder:-

The respondent-Company which is engaged in the manufacture of ceramic glazed tiles (wall and floor tiles) and unglazed ceramic vitrified porcelain tiles and is having two separate registration certificates from the Central Excise Department for their manufacture, had been paying duty @16% ad valorem after availing the abatement of 45% under Notification No.13/2002-CE (NT) dated 01.03.2002 and had also availed cenvat credit on inputs, capital goods used in manufacture of its final products under Rule 3 of Cenvat Credit Rules, 2002 (for short 'Rules, 2002'). On scrutiny of its record, the department found that w.e.f. 07.08.2003, the respondent had also started availing benefit of amended notifications dated 14.05.2003 and 29.07.2003 and had started paying duty @8% ad valorem without availing the facility of cenvat credit on the inputs. It had, however, neither debited nor reversed any amount in its cenvat credit account and PLA from 06.08.2003 though it was required to do so after starting making payment of duty @8% ad valorem.

3. It was further submitted that on being apprised of this fact by the officers of the department, the Senior Manager (Excise) and General Manager (Finance) of the respondent-Company debited certain amounts of money in its cenvat credit and PLA accounts. However, on verification of record and data provided by the respondent, it was observed that it had made short payment of the reversed cenvat credit to the extent of Rs.21,32,778/-. Consequently, a show cause notice was served upon the respondent on 17.08.2004 for explaining as to why the aforementioned amount be not demanded and recovered from it along with interest under Rule 12 of the Rules, 2002 and other provisions of the Act, 1944 and as to why penalty should not be imposed upon its officials/officers and itself for acts of omission and commission. The appellant then passed an order dated 18.10.2006 of assessment thereby raising demand of a sum of Rs.21,32,778/- after depositing an amount of Rs.1,45,00,289/- by the petitioner out of the amount of Rs.1,66,33,067/- which was equivalent to cenvat credit taken by the respondent on inputs in stock, in process or in its final products. Penalty amount of Rs.20 lacs under Rule 25 of the Rules, 2002 and Rs.50,000/- each on its General Manager (Finance) and Senior Manager (Excise) was also assessed.

4. Feeling aggrieved, the respondent preferred an appeal before the Tribunal which was allowed vide order dated 12.08.2015.

5. Dissatisfied, the appellant-revenue has preferred the instant appeal mainly on the ground that once the respondent-Company had availed exemption as granted vide notifications dated 01.03.2002, 14.05.2003 and 29.07.2003 respectively, then it was required to follow the conditions prescribed thereunder, in letter and spirit. It was required to pay an amount equivalent to cenvat credit taken on the inputs lying in stock or in process or inputs contained in the final products on 07.08.2003 before opting for payment of concessional rate of duty @8% ad valorem u