2010 (3) TMI 1072 - AT - Central Excise

Summary

Issues involved:
The issue involves the payment of interest on ineligible Cenvat credit taken by the appellants.

Summary:
The appellants, manufacturers of Cement availing Cenvat Credit facility, had availed Cenvat Credit on Furnace Oil from M/s. IOCL, Guntakal. The department found that M/s. IOCL had wrongly passed on excess credit to various customers, including the appellants. A show cause notice was issued proposing disallowance of Cenvat Credit. The appellants reversed the demanded amount but challenged the imposition of interest. The learned Commissioner (Appeals) upheld the confirmation of the reversal and the interest imposition. The appellant argued that Rule 7(2) of Cenvat Credit Rules, 2002 was satisfied, and Rule 14 may not apply. The learned SDR contended that interest was payable as the appellants utilized the irregular credit. The issue was the interest payable on the ineligible Cenvat credit taken by the appellants.

The learned Commissioner (Appeals) upheld the leviability of interest, stating that the appellants had used the irregular credit for duty payment without sufficient balance. The impugned order was upheld, rejecting the appeal. However, the appellant had not produced the Cenvat credit account extract before the learned Commissioner (Appeals). The Tribunal set aside the order and remanded the matter to reconsider the interest amount utilized by the appellants, following the principles of natural justice.

In conclusion, the impugned order confirming the interest amount was set aside and remanded for reconsideration.