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2013 (9) TMI 413 - AT - Central ExciseApplicability of Rule 173 Q - Appellants were manufacturers of excisable goods -They had been taking credit of duty paid on inputs as per the provision of Cenvat Credit Scheme - A show cause notice was issued for recovering the said interest and also proposing to impose penalty under Rule 173Q of the erstwhile Central Excise Rules for having taken credit wrongly - Held that:- Rule 173Q can be invoked only subject to provision of Section 11AC and Section 11AC was applicable only when there was fraud, suppression, mis-declaration or any act with intent to evade payment of duty - no such motive was attributed to them, no penalty can be imposed on them and the penalty imposed by the Commissioner (Appeals) required to be set aside - Union of India v. Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - Supreme Court] - when Cenvat credit was taken, interest was to be paid even if such credit had not been utilized for payment of excise duty. Whether interest was payable under Section 11AA of the Central Excise Act which was in force from 26-5-1995 to 11-5-2001 – Held that:- A careful reading of the provision shows that it was applicable only when a short levy or non-levy of excise duty occurred - Wrong Cenvat credit taken can result in short levy or non-levy of excise duty only when such wrong credit was utilized for payment of excise duty - Such utilization had not taken place - interest was not payable. Penalty under Rule 173Q also could be imposed only if for actions with intent to evade payment of duty - There was no intention to evade duty - So penalty under Rule 173Q also was not sustainable - Interest for the period 1-4-2000 to the date of reversal will be payable by M/s. Rama Industries Ltd. - Decided in favour of Assesse.
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