Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Rule 14 s Interest forgiven amendment in interest of assessee

Cenvat Credit - By: - Pradeep Jain - Dated:- 4-3-2015 Last Replied Date:- 4-3-2015 - The much anticipated 2015-2016 Finance Budget is here. It was presented by Hon ble Finance Minister, Arun Jaitley on 28th February 2015. Was it in favour of the common man or of the revenue? Has it brought the reforms as were promised? Whether the dreams shown by NDA Government last year fulfilled? Have the good days arrived? Answers to these questions will be closely spotted when the modifications so brought wi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he grey area in the nomenclature so that the ambiguity in law can be eradicated and shackles of litigation can be clogged. One such amendment has been brought in Rule 14 which now finally brings a full stop to the yearlong battle between the revenue and assessee. By this articulation we wish to throw light on the same. Testimony of Rule 14:- Rule 14 of the Cenvat Credit Rules, 2004 in earlier times read as under: 4. Recovery of CENVAT credit wrongly taken or erroneously refunded.- Where the CENV .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed a no. of show cause notices where the assessee erroneously had taken the credit, although the same was not utilized. The department mechanically interpreted the word or and contented that interest was to be paid even if the credit was just a slip-up,. On the other hand the assessees pleaded that the word or should be read as and and interest should be payable only if the credit so taken was utilized by them. As by this only the revenue shall attract the loss of revenue and hence should be lia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

case credit was taken wrongly, interest is payable only from the date of utilizing the credit, but not from the date of taking of credit. That Rule 14 of the CCR, 2004 should be read to mean that interest is chargeable only from the date of utilizing of credit. No interest can be claimed from the date of wrongly taking the credit. Revenue being not satisfied with the outcome of this judgment filed appeal before the Apex Court. The Apex Court in its judgment in UNION OF INDIA Vs. IND-SWIFT LABORA .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stances, such credit becomes recoverable along with interest. Thus, the Apex Court interpreted the provision of Rule 14 and held that Interest liability under Rule 14 of CCR, 2004 will arise from the date of taking credit and not from the date of utilization of credit. Thereafter, the judgment of the Karnataka High Court in the case of Commissioner of Central Excise and Service Tax, LTU, Bangalore v/s M/s Bill Forge Pvt Ltd, Bangalore [2011 (4) TMI 969 - KARNATAKA HIGH COURT ] was delivered wher .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Court in the case of Ind-Swift Laboratories Ltd. Amendment in Rule 14 vide Budget, 2012: - After the series of contrary verdicts, the government bought in a change in Rule 14 of the Cenvat Credit Rules, 2004 vide Notification No. 18/2012-CE(NT) dated 17.03.2012 to clarify the haziness contained in drafting of rule. The words taken or utilized wrongly were substituted by the words taken and utilized wrongly . This amendment surely favored the assessee and the assessee who otherwise would be on h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ised, the same shall be recovered from the manufacturer or the provider of output service, as the case may be, and the provisions of sections 11A of the Excise Act or section 73 of the Finance Act, 1994 (32 of 1994), as the case may be, shall apply mutatis mutandis for effecting such recoveries; (ii) Where the CENVAT credit has been taken and utilised wrongly or has been erroneously refunded, the same shall be recovered along with interest from the manufacturer or the provider of output service, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

st; (ii) credit admissible in terms of these rules taken during the month has been utilised next; (iii) credit inadmissible in terms of these rules taken during the month has been utilised thereafter. . Introduction of this substitution further shows direction to the adjudicating authority for the steps to be implemented by them while judging the issue of credit wrongly taken and not utilized or not utilized. The rule now says that:- If the assessee has wrongly taken credit and has not utilized .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion anyhow by the revenue with a view to hassle the assessee. This substitution further also provides the authority to take it deemed that assessee had followed the following procedure for taking the credit that is:- It shall be taken that the opening balance of the credit in beginning of month has been utilised first i.e. first in fist out method has been followed. Thereafter the credit which was admissible has been utilized. (iii) Lastly, the credit which was inadmissible has been utilized. W .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version