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2022 (1) TMI 357 - AT - Central ExciseReversal of CENVAT Credit - input service - Modernization, Renovation and repair of the factory or not - construction of water tank and pump room - HELD THAT:- Interest and penalty will arise only when there is a short payment and non payment of duty or wrong availment of Cenvat Credit. In the present case the appellant had availed the Cenvat Credit in respect of construction of water tank and pump room. Since this construction was done in the existing factory to expand the facility of the existing factory therefore, it will clearly fall under the Modernization and Renovation of the factory. This is not a case where a new factory was set up which excluded from the definition of input service. Since nature of construction done in the factory is of Renovation and Modernization of the existing factory which is clearly covered under inclusion clause of the definition of input service, therefore, the appellant was entitled for the Cenvat Credit of such input service. Since the Cenvat credit itself is admissible the same is not recoverable, consequently, neither any interest can be demanded nor any penalty can be imposed, therefore, the demand of interest and penalties clearly illegal and incorrect. Appeal allowed - decided in favor of appellant.
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