2010 (9) TMI 443

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..... , they were availing the benefit of Cenvat Credit scheme. During the scrutiny of ER-1 for the month of June 2005, it was observed that they had sent certain goods for job work to various job workers in terms of provisions of Rule 4(5)(a) of Cenvat Credit Rules, 2004, after availing Modvat Credit of Rs. 2,19,459/-. In terms of said rule, the goods cleared for job work basis are required to be received back within a period of 180 days from the date of clearance. As the goods were not received back within a period of 180 days, the appellants were directed to pay amount of Cenvat Credit availed by them. The appellants, accordingly, debited their Cenvat account on28-6-05. 3. The dispute in the present appeal relates to interest inasmuch as .....

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..... eriod of 180 days, the manufacturer is required to pay amount equivalent to Cenvat Credit. Though, said rule does not provide any time limit for reversal of such credit, but the reasonable interpretation of the same would leads one to believe that such reversal is required to be made immediately on expiry of 180 days. 6. The question now arises is that if such reversal is done after expiry of 180 days, whether manufacturer is required to pay interest on the same or not. As is clear, the said Rule 4(5)(a) does not provide any specific mention of payment of interest or the consequence of non-reversal of Cenvat Credit on expiry of 180 days. The interest stand provided in terms of Rule 14 of Cenvat Credit Rules, 2004, which have been invo .....

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..... provisions of Rule 14, for payment of interest would get attract. 9. However, it is not clear in the present case as to whether the credit required to be reversed by the assessee was, in fact, utilized by him for payment of duty on their final products, cleared in the meanwhile or the same continued to remain in the Cenvat account books. If the credit was not utilized and continue to remain in the account books, the same would not attract interest, in terms of the settled law on the issue by various judgments. 10. For the verification of the above factual position, I set aside the impugned order and remand the matter to original adjudicating authority for examining the above aspects and to re-decide on the issue of interest, acc .....

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