2018 (8) TMI 689 - AT - Central Excise

Reversal of CENVAT Credit - credit reversed on the input removed as such, is lesser than the CENVAT Credit taken on such inputs - Held that:- It cannot be disputed that the goods were removed only to the sister unit of the appellant. In a plethora of decisions, higher appellate forums have consistently held that in such situations there would be revenue neutrality, since even if the credit had been reversed or the duty paid, the sister unit would well have been able to take the same amount as input credit.

The ingredients attracting imposition of penalty under Section 11AC of the Act are not present in this case - the imposition of equal penalty of ₹ 2,85,27,320/- under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the Act, cannot sustain and requires to be set aside.

As this submission only relates to the method and manner of calculation of interest, the matter is remanded to the adjudicating authority only for the limited purpose of ascertaining the correctness and interest worked out after taking the contentions of the appellants into consideration - appeal allowed by way of remand.