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2014 (10) TMI 717 - AT - Service TaxSuo moto credit - earlier when objected by the department, assessee reversed the credit with interest - after winning the appeal he took the re-credit of amount reversed earlier with interest - Held that:- When service tax was not liable to be paid, assessee should not have been made to pay. Having made them to pay, credit should have been allowed gracefully. Having denied the credit, when they won the appeal, they should have been advised to reverse the suo moto credit taken and file a refund claim which they would have done since when department wrote a letter asking them whether they have taken suo moto credit, time was still available for filing refund claim. When advice was given to the assessee it was a wrong advice which resulted in proceedings initiated by the department itself. When advice was required to be given, no advice was given instead proceedings were initiated. To add insult to injury, Penalty that too mandatory penalty was imposed. We find approach of the department is not at all correct. Strictly speaking, legally, the credit of interest on CENVAT credit availed is also wrong because only credit could have been taken which was reversed at the insistence of the department and not the interest paid. Nevertheless in this case since the entire proceedings was unnecessary and whole litigation process was unnecessary and the amount recovered itself was not at all recoverable, we consider that at some stage the matter should be closed - there is absolutely no revenue loss caused to the Revenue so far - Decided in favour of assessee.
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