Rule 14 of CCR vs Section 11A of CEA?
IN a recent article on this portal, Is Rule 14 ultra vires the Central Excise Act?, my friend Prem Kumar Francis raised a question whether Section 11A of the Central Excise Act can be applied in Rule 14 for recovering CENVAT Credit, as Section 11A refers to duty and not credit. Writer and Advocate Gururaj informs that this question was raised during the hearing in the Bill Forge case in the Karnataka High Court.
In an article Which rule should I invoke? on this site, a departmental officer wondered as to what the recovery provisions are for wrong credit.
This question was judicially touched upon in the Vikram Ispat case in which a preliminary objection was raised that it was not open to the department to invoke section 11A of the Central Excise Act for recovery of any amount of CENVAT credit availed on input services.
The Departmental Representative submitted that section 11A is very much applicable to a case where inadmissible CENVAT credit has been utilized for payment of duty of excise on final products.
The Tribunal agreed with the DR and observed that it appears that sections 11A and 11AB will be applicable where the CENVAT credit in question has been utilized for payment of duty of excise on final products whereas sections 73 and 75 of the Finance Act are applicable where the credit has been utilized for payment of service tax on output services.
Most probably the phrase mutatis mutandis was used in Rule 14 without knowing its real meaning.