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2018 (8) TMI 1975 - AT - Central ExciseCENVAT Credit - one to one co-relation between the credit taken against inputs/input services to the finish goods cleared on payment of duty - Rule 14 of the Cenvat Credit Rules, 2004 - HELD THAT:- The Commissioner (Appeals), without addressing the ground of the availability of sufficient credit reserves, proceeded to uphold the findings of the Assistant Commissioner by passing the impugned Order-in-Appeal No. 101/KOL-V/2017 dt. 21/11/2017. Particularly, it was perfunctorily observed that there was availment and utilization of credit of ₹ 3,34,458/- and that in view of the Board Circular No. 897/17/2009 dt. 3.9.2009 and the Apex Court decision in Union of India v. Ind Swift Laboratories Ltd. [2011 (2) TMI 6 - SUPREME COURT], interest was also recoverable thereon even in the absence of any utilization of credit - The penalty imposed on the appellant was also confirmed in view of the fact that the appellant had admitted to wrongful availment of credit, and that the error was detected in pursuance of audit proceedings. Where the Department had itself acknowledged by the said letter dt. 1.03.2013 that the purported short paid duty was only ₹ 64,972 (incl. of cess), it was not open for them to thereafter allege short payment of duty of another ₹ 3,34,458/- by a subsequent Show Cause Notice issued to the appellant. Notably, the Assistant Commissioner had even observed in the said adjudication order that the payment of ₹ 66,000/- effected by the appellant towards the purported short-paid amount of ₹ 64,972/- was not part of the subject matter of the present dispute. As a result of the actions of the Department, the appellant has ended up paying ₹ 3,67,458/- through PLA and reversing another ₹ 33,000 in its credit register. A total of ₹ 4,00, 458/- has been appropriated by the Department against a dispute that concerned wrongly availed credit of only ₹ 3,34,458/-. Evidently, by seeking to recover ₹ 3,34,458/- by the said adjudication order, the Department is attempting to recover duty of ₹ 64,972/- twice, and also recover an additional duty of ₹ 2,69,486/- though credit to such extent was not utilized by the appellant as aforesaid. Further, since it is the trite law that there is no one to one correlation between the credit taken against inputs/input services to the finished goods cleared on payment of duty by the concerned assessee, there can be no utilization of the disputed credit if there was sufficient/surplus undisputed credit balance left even after meeting the duty requirements for the said period. Even for the month of march, 2012, there can be no basis for recovering interest on the wrongly availed credit - there has been no short payment of duty on the part of the appellant during the said period as alleged, particularly in view of there being no utilization of credit as aforesaid, and in view of the purported short paid duty of ₹ 64,972/- having already been paid by the appellant in a prior Rule 8 (3A), CER, 02 proceeding, which the Department chose not to pursue. The impugned demand under Rule 14 of the Cenvat Credit Rules, 2004 for recovery of ₹ 3,34,458/- therefore entails double recovery of duties already collected by the State. There can be no basis for recoveries purportedly confirmed by the said appellate order dated 21.11.2017 of duty, interest and/or penalty under Rules 14 and 15 of the Cenvat Credit Rules, 2004 read with Sections 11A and 11AC of the Central Excise Act, 1944, for the said period - Appeal allowed - decided in favor of appellant.
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