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2018 (9) TMI 811 - CESTAT CHENNAIDemand of Interest and penalties - CENVAT Credit taken wrongly but reversed subsequently - procured inputs from 100% EOU - restrictions as per the formula prescribed under Rule 3 (7) (A) of the Cenvat Credit Rules, 2004 not followed - Held that:- Where wrong Cenvat credit taken inadvertently, if reversed subsequently, and the balance Cenvat credit on the date of reversal is more than the disputed quantum of credit, there cannot be any demand for interest on the assessee and also no imposition of penalty either. During the months of January and February 2009, when the credit balances of the respondent were much lower than the quantum of excess Cenvat credit, taken erroneously, the lower appellate authority should have upheld demands to the extent of short fall between the proportionate excess credits availed and the actual credit balance amount available. To this extent, and for these two periods, the respondent will have to discharge interest liability. Only for this purpose, the matter is remanded to the original authority for reworking of the quantum of interest required to be paid by the respondent - penalties set aside. Appeal allowed in part and part matter on remand.
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