Per P.K. Das :

The relevant facts of the case, in brief, are that the appellants are engaged in the manufacture of SGCI Insets, Runner & Riser and Steel Castings classifiable under sub-heading Nos. 7203.00, 7204.90 and 7325.90 respectively of the schedule to the Central Excise Tariff Act, 1985. It has been alleged that during the period from April, 2003 to June, 2003, the appellant had defaulted in making payment of duty amounting to Rs. 2,82,267/-, when they have the closing balance of Cenvat Account of Rs. 685/- and Rs. 8,801/- for the month of April, 2003 and May, 2003 respectively. The appellant paid the defaulted amount in the month of July, 2003 and August, 2003 through RG-23A Part-II Account. The adjudicating authority confirmed the demand of duty of Rs. 2,82,267/-, which they failed to pay from PLA and payment of interest and also imposed penalty of Rs. 25,000/- under Rule 25 of the Central Excise Rules, 2002. The Commissioner (Appeals) upheld the adjudication order.

2. Ld. Advocate on behalf of the appellant submits that the Hon'ble Bombay High Court in the case of Lloyds Steel Industries Limited Vs. Union of India reported in 2005 (183) ELT 351 (Bombay) held that the assessee is entitled to utilize Cenvat Credit for payment of central excise duty for the clearance of the final products in respect of forfeiture of facility, due to default of payment of duty. He also relied upon the decision of the Tribunal in the case of SCT Ltd. Vs. CCE, Meerut reported in 2006 (77) RLT 54 (CESTAT-Del.)=2006 (202) ELT 814 (Tribunal-Delhi).

3. Ld. DR submits that the present case is squarely covered by the decision of the Tribunal in the case of Plasweave Pvt. Ltd. Vs. CCE, Tirunelveli reported in 2007 (211) ELT 27 (Tribunal-Chennai). He submits that the case laws relied upon by the ld. Advocate are applicable in the case of forfeiture of default of payment of duty.

4. After hearing both the sides and on perusal of the records, I find that the appellants have not paid the duty during the period from April, 2003 to June, 2003 and they were not having sufficient amount in Cenvat Credit Account on the last day of the relevant months. The appellant paid the duty subsequently from their Cenvat Account. Admittedly, the appellants had no sufficient balance in the Cenvat Account during the disputed period when the goods cleared without payment of duty. Therefore, they are not entitled to avail the Cenvat credit for the clearance of the good during the disputed period. The Tribunal in the case of Plasweave Pvt. Limited Vs. CCE, Tirunelveli (supra) held as under:-

"5. Having carefully considered the submissions made by both sides and the case records, I find that the assessees had removed the goods without payment of duty to the extent of Rs. 3,20,538/- in the case of RPL and Rs. 2,32,424/- in the case of PPL during the material period which had been adjusted against Cenvat credit accrued later. Therefore, the duty demands are in accordance with law and are sustainable. The appellants shall pay the duty amounts in PLA. On such payment of duty in PLA, the assessees will be eligible for Cenvat credit to the corresponding extent in their Cenvat accounts. As regards the penalties on the assessees are concerned, I find that equal amount of penalty imposed in both the cases is too harsh in view of the peculiar facts of the case. Accordingly, I reduce the penalties to Rs 35,000/- on RPL and Rs. 25,000/- on PPL. The penalty on Shri Murugan, the third appellant is reduced to Rs. 2,000/-. The impugned orders are otherwise upheld."

5. The ld. Advocate relied upon the decision of the Hon'ble Bombay High Court and the Tribunal, which are related to forfeiture of facility of monthly/fortnightly payment of duty. The present case is not the payment of duty during the forfeiture period and the case laws are not applicable herein. I find that the appellant paid the duties from Cenvat Account for the payment of clearance of goods during the relevant period when th