2024 (2) TMI 669 - CESTAT ALLAHABAD

Recovery of interest on the wrongly availed credit - penalty under Rule 15 of the Cenvat Credit Rules, 2004 - HELD THAT:- The issue involved in the present case is squarely covered by the decision of Hon’ble Supreme Court in the case of M/s Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - SUPREME COURT] following has been held Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as "AND" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "OR" in between the expressions `taken' or `utilized wrongly' or `has been erroneously refunded' as the word "AND". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest.

It is quite evident that the N/N. 18/2012-CE (NT) clearly provides the date from which the word “or” has been substituted in Rule 14 of The CENVAT Credit Rules, 2004. It is unambiguously provided that the substitution is being made from 17th March 2012, and no retrospective effect has been given to the said amendment/ substitution - It is settled position in law that physical statute need to be interpreted in a literal sense on the basis of what have been stated in the law or statute. There is no room for indictment or according to any beneficial construction to the appellant/assessee.

It is also settled law that interest is a statutory/ contractual liability for the wrongly taken credit or is equivalent to the time value of the money/credit. It is an absolute liability as has been held by the courts in the various decisions for the same no person could claim the benefit and claim that interest as provided by the statute could not have been recovered as has been held the same is barred by limitation. It was for the appellant to have paid the interest along with the reversal of the excess credit taken. It is also observed that during the period of dispute section 11A did not provided, for recovery of interest and hence was not applicable. The recovery of interest was made in terms of Section 11AB/ 11AA which did not provided for any limitation.

As the demand made within the period of five years for recovery it is upheld, there are no merits in the submissions made for not imposition of the penalties imposed under Rule 15, in view of the decision of the Hon’ble Apex Court in the case of Rajasthan Spinning and Weaving Mills Ltd [2009 (5) TMI 15 - SUPREME COURT].

There are no merits in the appeal filed by the appellant - appeal dismissed.