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2022 (11) TMI 561 - AT - Service TaxDemand of interest and penalty - reversal of CENVAT credit prior to issuance of SCN - HELD THAT:- Since the basic fact is that the respondent has reversed the entire Cenvat credit taken by them even prior to issuance of the notice without utilizing the same, there are no merit in the appeal filed by the Revenue. This appeal basically does not challenge the dropping of demand by disallowing the abatement claimed, but seeks to ask for interest on the Cenvat credit wrongly taken by the respondent and for imposition of penalty on the respondent. The Principal Commissioner has in para 15 of the impugned order very categorically discussed the issue and has recorded his finding that not a single penny of the Cenvat credit taken was utilized before its reversal. Accordingly he has held that no interest was to be demanded. Just by taking the Cenvat credit in its book of account without utilizing the same, respondent has not caused prejudice to the Revenue. Taking note of the Hon’ble Supreme Court decision in the case of UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. 2011 (2) TMI 6 - SUPREME COURT] and Rule 14 of the Cenvat Credit Rules the provisions of which were amended to change the words “taken or utilized”, there cannot be any demand for the interest. As the entire amount of Cenvat credit was reversed prior to issuance of show cause notice, penalty under Section 73(3) of the Finance Act, 1994 is waived off. Appeal dismissed.
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