2018 (12) TMI 163 – CESTAT KOLKATA – TMI – Demand of Interest in terms of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AA of Central Excise Act, 1944 – Held that:- From the adjudication order that the appellant had taken credit but not utilized the same and reversed the same prior to the issuance of the show cause notice. The Adjudicating Authority following the Board’s Circular dated 03.09.2009 observed that interest is payable even when credit has not been utilized.
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Larger Bench of the Tribunal in the case of J.K. Tyre & Industries Ltd. v. Asst. Commr. of C.Ex., Mysore [2016 (11) TMI 911 – CESTAT BANGALORE] held that wrong availment of Cenvat Credit, interest is not payable, if reversed before utilization.
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The demand of interest on unutilised Cenvat Credit, cannot be sustained – appeal allowed in part. – Appeal No. E/78022/2018 – FO/76969/2018 – Dated:- 19-11-2018 – Shri P.K. Choudhary, Member (Judicial) Shri Madhusudan Lila, Manager for the Appellant (s) Shr
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availed. According to the ld. Representative, the liability of interest, if any, should be to the tune of ₹ 12,963/- only which was his submission before the lower appellate authority. 5. Ld. DR reiterates the Orders of the lower authorities and submits that the demand of interest has rightly been made and the appeal of the assessee has no merit and the same should be dismissed. 6. Heard both sides and perused the appeal record. 7. I find from the adjudication order that the appellant had taken credit but not utilized the same and reversed the same prior to the issuance of the show cause notice. The Adjudicating Authority following the Board s Circular dated 03.09.2009 observed that interest is payable even when credit has not been utilized. I find that the Larger Bench of the Tribunal in the case of J.K. Tyre & Industries Ltd. v. Asst. Commr. of C.Ex., Mysore [2016 (340) E.L.T. 393 (Tri.-LB)] held that wrong availment of Cenvat Credit, interest is not payable, if reversed be
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Mad.) and decision of this Hon ble Tribunal in Force Motors Ltd v. CCE., Pune – 2015-TIOL-1833- CESTAT-Mum = 2015 (329) E.L.T. 543 (Tribunal). The learned Authorised Representative strongly argued that if the audit had not pointed out the wrong availment of cenvat credit, it would have resulted in short levy and by simple filing returns by itself will not rescue the appellants from the mischief of suppression. 5. We find that the appellants had taken Cenvat credit on the basis of invoices raised in the name of their Head Office. The said Cenvat Credit has been taken by one of their manufacturing unit. There is no allegation of double availment of the said Cenvat Credit by any other unit. It is also observed that the appellants had reversed the Cenvat Credit on being pointed out by the audit. The appellants have not seriously contested the necessity or correctness of reversal of the Cenvat Credit before the lower authorities. However, they are seriously contesting the levy of interest a
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ilization, the same amounts to not taking credit. In the circumstances, where CENVAT credit is taken wrongly, but reversed before the same is utilized, it amounts to not taking credit. Accordingly, when no credit is taken, the provisions of Rule 14 of the Rules would not be attracted. The view adopted by the Tribunal as well as the authorities below is, therefore, in consonance with the view taken by the Supreme Court in the above referred decision. 6. We find that in this case the appellant had reversed the credit as soon as it was pointed out that they had wrongly availed the same, and they had not utilised the Cenvat Credit so availed till the time of reversal of the same. Therefore, the decision of Hon ble Jurisdictional High Court, relying upon the decision of the Hon ble Supreme Court on the very same issue is applicable in this case. We, therefore, hold that no interest is payable in the present case. On the issue of penalty under Section 11AC, it is seen that the same is not le
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