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2021 (9) TMI 294 - CESTAT AHMEDABADLevy of interest - Cenvat credit availed on the contribution of service charges collected from employees, which is not Cenvatable - Outdoor Catering Services - levy of penalty - Rule 14 of Cenvat Credit Rules, 2004 - HELD THAT:- The issue of availment of Cenvat credit on employees’ contribution in respect of Outdoor Catering Services was debatable and the issue has been finally settled in the case of CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., [2010 (10) TMI 13 - BOMBAY HIGH COURT] by the Hon’ble Bombay High Court. Therefore, in this backdrop of the issue the malafide intention cannot be attributed to the appellant. Therefore, the penalty imposed by the Lower Authority is not sustainable hence, penalty is set aside. Interest on availment of Cenvat credit - HELD THAT:- It has been settled that the credit on Outdoor Catering Service to the extent of contribution of services charges borne by the employee is not Cenvatable. Therefore, the credit taken by the appellant is wrongly taken credit. Therefore, in terms of Rule 14 of CCR, 2004 interest is chargeable. In the Rule it is clearly provided that whether the credit is taken or utilized the interest will be chargeable. In the present case even if the credit was not utilized but taken wrongly therefore, the interest is chargeable from the date of taking credit till the date of reversal, if any made - the appellant is liable to pay interest. The penalties imposed upon the appellants are set aside and demand of interest is maintained - Appeal allowed in part.
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