Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2019 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 674 - AT - Central ExciseDemand of interest and penalty - CENVAT Credit - inputs - irregular availment of Cenvat Credit on input stored outside the factory in contravention of Rule 8 of the Cenvat Credit Rules, 2004 - period June 2011 to March 2013 - whether penalty and interest can be imposed for availing Cenvat credit on inputs stored outside the factory? HELD THAT:- The Ld. Commissioner has made a detailed examination of the ER-1 returns filed by the appellant, on perusal of which he has given a specific finding that availment and reversal of credits have duly been reflected in the said returns which is based on the RG-23A Pt-II registers maintained at both the places – within the factory as well as the Storage tank located outside the factory. He also observed that said availment of credit has been shown under the head of “other payment” in ER-1 returns. Moreover, he has admitted that merely because of error in availment of credit when the entire input covered in an invoice are received in the factory, the substantial benefit of cenvat credit cannot be denied. Demand of interest - HELD THAT:- The fact that adequate credit balance is available during the material period and is not in dispute. Despite that credit has been pre-maturely reflected in the RG-23 register and ER-1 return since goods were not received in the factory, there is no consequent short payment of duty and hence no loss to exchequer - Moreover, as the Ld. Commissioner himself has observed that for mere procedural lapse, the substantial benefit of credit cannot be denied, more particularly in case where there is a sufficient credit balance always available during the period in dispute - interest cannot be levied when sufficient credit balance is available, despite that a portion of credit amount has been availed contrary to the guidelines issued in trade notices, inasmuch as in such cases there is no loss to the exchequer and therefore there cannot be any question to compensate the Revenue by levying interest. The demand of interest and the penalty imposed cannot be sustained and accordingly, the same are set aside - appeal allowed - decided in favor of appellant.
|