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2022 (2) TMI 792 - AT - Service TaxRecovery of interest and imposition of penalty under Sections 77 & 78 is justified - Suo moto reversal of excess CENVAT Credit - excess credit was never utilized - time limitation - contumacious conducts like suppression or falsification of record - HELD THAT:- The impugned order is under the teeth of the Hon'ble Supreme Court as per the law laid down in the case of Chandrapur Magnet Wires (P) Ltd. [1995 (12) TMI 72 - SUPREME COURT], wherein it has been held that the CENVAT Credit taken and which have been suo moto reversed without utilization, amounts to CENVAT Credit never to have been taken. Rule 14(1)(i) of CENVAT Credit Rules, 2004 provides that where the CENVAT Credit had been taken wrongly but not utilized, the same shall be recovered under the provisions of Section 11A of the Central Excise Act, 1944 and Section 73 of the Finance Act, 1994 as the case may be. Further Rule 14(1)(ii) provides that where CENVAT Credit has been taken and utilized wrongly or has been erroneously refunded the same shall be recovered along with interest - there is clear distinction made in the statute that interest is to be recovered only in case of utilization of CENVAT Credit taken wrongly. Further admitted fact of the present case is that the appellant had given cogent explanation that the excess credit occurred due to system error. The appellant had reversed the credit suo moto under proper intimation to the Department and also had their quantum of refund reduced proportionately. It is apparent that the show-cause notice is issued after more than three years from the date of reversal and its intimation to the Department. Appeal allowed - decided in favor of appellant.
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