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2020 (3) TMI 320 - AT - Service TaxDemand of Interest and penalty - availment of CENVAT credit that stood, either adjusted or reversed, before completion of the adjudication process - proper consideration of issues not made - HELD THAT:- It appears from the submissions, and from a perusal of the impugned order, that the contentions of the appellant have not been examined by the adjudicating authority. This is grievous remiss that can be rectified only in fresh proceedings. In the dispute before us, the reversal of credit before issue of show cause notice renders the taking of credit to have been erased ab initio. There is not even a whiff of allegation that the credit reversed had been utilized, or could have been utilized, to the detriment of the exchequer. The renunciation of jurisdiction to adjudicate upon the claim for exclusion from interest liability does not appear to have been sanctioned by the decision of the Hon’ble Supreme Court. From a perusal of rule 14 of CENVAT Credit Rules, 2004 and, in particular, of the disjunctive collation of ‘taken’, ‘utilized’ and ‘erroneously refunded’ with the expression ‘wrongly’ qualifying, not all three but only two of these, it would appear that the assumption of credit and a refund of credit, if wrong, would have to pay the price in the form of ‘interest.’ However, it is unusual for ‘utilization’ to be qualified with ‘ineligibility’ on its own as ‘utilization’ is solely for the purpose of discharge of tax/duty liability which, even if not warranted, does not, by any stretch of usage, behove description as ‘wrongly.’ Such transfer of epithet, borne out of drafting frailty, can only reasonably mean ‘utilization’ after having been wrongly taken and, therefore, ineligible. The appeal is allowed by way of remand to determine the interest liability, as well as the penal consequences, in the light of the submissions that were not considered by the adjudicating authority in the impugned order.
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