TMI Blog2014 (10) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... moto credit, time was still available for filing refund claim. When advice was given to the assessee it was a wrong advice which resulted in proceedings initiated by the department itself. When advice was required to be given, no advice was given instead proceedings were initiated. To add insult to injury, Penalty that too mandatory penalty was imposed. We find approach of the department is not at all correct. Strictly speaking, legally, the credit of interest on CENVAT credit availed is also wrong because only credit could have been taken which was reversed at the insistence of the department and not the interest paid. Nevertheless in this case since the entire proceedings was unnecessary and whole litigation process was unnecessary an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igible input service, the appellant took CENVAT credit of the same. Taking of CENVAT credit was objected by the department on the allegation that service tax paid related to period prior to 10.09.2004 and service tax was not liable to be paid and hence the appellant was not entitled to take credit. The appellant immediately reversed the credit availed of service tax of ₹ 43, 29,644/- and also paid interest of ₹ 12, 86,082/-. The said reversal or payment of CENVAT credit was made under protest by the appellant vide TR6 Challan No. 10025 dated 18.12.2008. There was no statutory liability to pay service tax prior to introduction of Section 66A and the appellant took credit of wrong amount of service tax paid by them, but the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudication order dated 30.09.2009 pursuant to allowing of appeal by the Commissioner (Appeals). 1.7. Thereafter, the department issued a show-cause notice in C.No. V/15/CE/010/2011/LTU Adjn dated 3.6.2011 wherein it was alleged the appellant CENVAT credit of ₹ 56, 70,782/- availed neither based on any documents prescribed under Rule 9 of the CENVAT Credit Rules, 2004 nor on the basis of any refund order under Section 11B of the Act and hence suo moto credit was not acceptable. It was alleged that credit availed by the appellant of ₹ 56, 70,782/- was in contravention of Rule 9 of the CENVAT Credit Rules and the same was recoverable under Rule 14 read with Section 11A of the Act. The notice also proposed to impose penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the Commissioner. Therefore if the impugned order is upheld, we would be starting another round of litigation. Since appellants will be able to file another refund claim for the amounts reversed by them since in any case they were eligible for refund which they took as credit. The relevant date for claiming refund will be the date of reversal of the credit taken and in any case that will become a disputable point. The entire amount was paid much later after the receipt of service at the insistence of the department. Having seen several orders that have come before us, we are quite sure that refund will be denied on the basis of unjust enrichment as well as on the ground that it is time-barred setting off another round of litigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n suo moto credit, time was still available for filing refund claim. When advice was given to the assessee it was a wrong advice which resulted in proceedings initiated by the department itself. When advice was required to be given, no advice was given instead proceedings were initiated. To add insult to injury, Penalty that too mandatory penalty was imposed. We find approach of the department is not at all correct. Strictly speaking, legally, the credit of interest on CENVAT credit availed is also wrong because only credit could have been taken which was reversed at the insistence of the department and not the interest paid. Nevertheless in this case since the entire proceedings was unnecessary and whole litigation process was unnecessary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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