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2024 (4) TMI 901 - AT - Central ExciseReversal of CENVAT Credit - Interest liability on Reversal - reversal of proportionate input credit relating to the exempted goods cleared every month properly during the periods from November 2007 to January 2011 and from November 2008 to December 2010 - Rule 6(3)(a) and Rule 6(3)(ii) of CENVAT Credit Rules - HELD THAT:- The appellant’s claim that sufficient balance was available in CENVAT Credit account to reverse the credit and no pecuniary benefit was derived in any manner has not been contested by Revenue. Under the CENVAT credit scheme there was no co-relation of the raw material and the final product, and the manufacturer is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. The government has not been deprived of duty on the date it became due as sufficient credit was available to take care of the debits made even without taking the disputed credit into account. The Hon’ble High Court of Karnataka in 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] has examined the judgment of the Hon’ble Supreme Court in UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. [2011 (2) TMI 6 - SUPREME COURT] and distinguished the same. The Hon’ble High Court held that when the assessee has not taken the benefit of the CENVAT credit, there is no liability to pay interest. Once the credit entry was reversed, it is as if the CENVAT credit was not available. Also, no interest is payable in the circumstances and the question of imposition of a penalty does not arise. The impugned orders are hence set aside, and the appeals are allowed.
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