Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2019 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 1102 - AT - Central ExciseRefund of interest - appellant only availed the Cenvat Credit in their books and not utilized the credit at all - whether the appellant is liable to pay interest for the mistakenly/irregularly availing Cenvat credit which they did not utilize? - HELD THAT:- The Hon’ble Karnataka High in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] after considering the Hon’ble Supreme Court’s decision in the case of UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. [2011 (2) TMI 6 - SUPREME COURT] held that if the wrongly availed credit does not stand utilised by the assessee and is reversed before utilisation, no interest liability would arise against them. A larger Bench of the Tribunal in the matter of J.K. TYRE & INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE [2016 (11) TMI 911 - CESTAT BANGALORE] has held that since the appellant therein had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty, interest liability would not arise. It is not disputed that the irregularly availed Cenvat Credit was reversed by the appellants immediately upon being pointed out by the audit that too with interest and therefore no show cause notice was issued for that purpose. The said credit was not utilized by the appellant for payment of excise duty etc. It is merely a book entry and therefore the credit wrongly availed does not amount to short payment of duty - The credit having been taken inadvertently stands reversed by the Appellant even before utilisation, no interest liability would arise inasmuch as there is no loss to the Revenue and the credit remained as a paper entry in their books of accounts. Since there was no loss of revenue to the government exchequer, therefore the question of compensating the revenue by way of interest does not arise. In the facts of the present case, Revenue cannot impose liability to pay interest on the assessee invoking the provisions of Rule 14 of Cenvat Credit Rules, 2004 - Appeal allowed - decided in favor of appellant.
|