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2018 (11) TMI 492 - AT - Central ExciseCENVAT credit - education cess paid on inputs - the appellant had stopped availing CENVAT credit on inputs after insertion of Explanation III in rule 6(3) of CENVAT Credit Rules, 2004 - demand of interest - Held that:- Reliance placed in the case of MAHINDRA & MAHINDRA LTD. VERSUS COMMISSIONER OF C. EX., MUMBAI [2007 (2) TMI 24 - CESTAT, MUMBAI], to hold that the appellant is ineligible to avail CENVAT credit - To consider the cess discharged by the appellant under another law to which CENVAT Credit Rules, 2004 does not apply, or coverage therein by self-inflicted burden of duty, despite escapement under law, would be a construction that negates the entire scheme of CENVAT credit. Accordingly, the erasure of CENVAT credit in the impugned order cannot be faulted - liability of interest upheld. Penalty u/r 25 and rule 26 of CENVAT Credit Rules, 2004 - Held that:- It is not controverted that the credit so availed has been utilised for any purpose. Moreover, it was only with the insertion of Explanation III in rule 6(3) of CENVAT Credit Rules, 2004 that the ineligibility became unambiguously clear - penalty not warranted. Appeal allowed in part.
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