TMI Blog2013 (6) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in providing telecommunication services and is registered with the department for service tax purposes. Audit of the records of the company for the period 2004-05 to 2007-08 revealed the following discrepancies. (a) The appellant availed CENVAT credit on input services on billed basis resulting in excess availment of credit of service tax to the tune of ₹ 2,30,06,772/- as on 31-3-2008 without actually paying for the input services received in violation of the provisions of Rule 4(7) of the CENVAT Credit Rules, 2004. On being pointed out by the audit team, the assessee reversed the excess credit taken. (b) The assessee discharged service tax liability through CENVAT credit account not on the due dates but on dates later than the due dates and also in many cases the assessee has short-paid the service tax liability. However, on such delayed payment the assessee did not discharge the interest liability as required under Section 75 of the Finance Act, 1994, which was quantified at ₹ 1,78,02,813/- for the period March 04 to March 08. It was further found that as on 31-3-2008, the assessee had short-paid service tax amounting to Rs. 1,00,54,774/- which on being poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. The said mistake did not have any revenue implication inasmuch as the appellant had enough balance in the CENVAT credit account. And, lastly; it is argued that the entire demand is confirmed invoking the extended period of time which is not sustainable in law. Inasmuch as the appellant did not have any intention to evade any tax and the mistakes were rectified as soon as the same were pointed out, the extended period of time could not be invoked. 4. The learned Additional Commissioner (AR) appearing for the Revenue on the other hand strongly opposes the contentions and relies on the judgment of the Hon ble Apex Court in the case of Ind-Swift Laboratories reported in 2011 (265) E.L.T. 3 = 2012 (25) S.T.R. 184 wherein it was held that liability to pay interest arises when credit is wrongly taken and it is not necessary that to attract interest liability, the credit should have been utilised. He further submits that the extended period of time has been rightly invoked as the appellant suppressed the facts by furnishing wrong returns and the short payment of service tax and wrong availment of credit could be detected only on audit of the books of accounts of the appellant. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of sections 11A and 11AB of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries. 16. A bare reading of the said Rule would indicate that the manufacturer or the provider of the output service becomes liable to pay interest along with duty where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded and that in the case of the aforesaid nature the provision of section 11AB would apply for effecting such recovery. 17. We have very carefully read the impugned judgment and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the Cenvat credit has been utilized wrongly for according to the High Court interest can not be claimed simply for the reason that the Cenvat credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High Court on a conjoint reading of section 11AB of the Act and Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n payment of tax and for such delay interest is liable to be paid under Section 75. The Hon ble Apex Court while examining the scope of Section 11AB of the Central Excise Act in International Auto Limited reported in 2010 (250) E.L.T. 3 (S.C.) held that interest is charged to compensate the department for loss of revenue and whenever there is a delay in payment of tax, interest is leviable for the period of delay. The same view was held in SKF India Ltd. case reported in 2009 (239) E.L.T. 385. Thus in respect of demand of interest, in cases where there was delay in payment of service tax by the appellant, amounting to ₹ 2.10 crore approximately, the provisions of Section 75 of the Finance Act, 1994 are clearly attracted and there is no prima facie case in favour of the appellant. 5.4 As regards the invoking of extended period of time, it is a question of fact as well as law. On a perusal of the records placed before us, it prima facie appears that there were substantial differences between the figures reflected in the books of accounts maintained by the appellant and those declared in the service tax returns filed by the appellant with the department. These discrepancies co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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