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2015 (10) TMI 108 - CESTAT BANGALORE

2015 (10) TMI 108 - CESTAT BANGALORE - TMI - Demand of interest on reversal of cenvat credit - Reversal of CENVAT credit if goods are not returned from the Job worker within 180 days - Demand of interest and penalty - Held that:- Karnataka High Court [2011 (4) TMI 969 - KARNATAKA HIGH COURT] as well as Hon’ble Madras High Court [2014 (11) TMI 89 - MADRAS HIGH COURT] in the cases have considered the decision of Hon’ble Supreme Court made in the case of UOI Vs. Ind-Swift Laboratories Ltd. [2011 (2 .....

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SM - Final Order No. 21940 / 2015 - Dated:- 16-9-2015 - Shri Ashok K. Arya, Technical Member For the Petitioner : Ms. Preetha, Advocate For the Respondent : Shri Mohd. Yousuf, Addl. Commissioner(AR) ORDER Per : ASHOK K. ARYA Both the parties have been heard in detail. 2. The matter concerns the liability of the interest on the CENVAT credit taken for the inputs which had been sent for job work and were not returned within 180 days as per Rule 4(5)(a) of the CENVAT Credit Rules 2004 (the Rules fo .....

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workers within the period of 180 days. 2. The learned advocate Ms. Preetha appearing for the appellant mentions that there has been an amendment in the year 2015 in the Explanation II to Rule 4(7) whereby in place of the word sub-rule, the word rule has been substituted regarding the recoveries to be made under Rule 14 of the Rules. She further argues that therefore, the recovery under Rule 14 earlier to 2015 amendment could be made with reference to only sub-rule 7 of Rule 4 of the Rules using .....

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was wrongly taken but not utilised. 4. The learned AR Shri Mohammed Yousuf has argued that interest and penalty are always recoverable both for the periods prior to the said amendment made in 2015 and also after the said amendment made in the Explanation to sub-rule 7 of Rule 4 of the Rules, wherever CENVAT credit has been wrongly taken or utilised by an assessee. The learned AR cites Hon ble Supreme Court s decision in the case of UOI Vs. Ind-Swift Laboratories Ltd. [2011(265) ELT 3 (SC)] where .....

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wrongly been taken but not utilised, the interest is not payable. The Hon ble Karnataka High court in the said decision says that before utilisation of credit if the entry has been reversed, it amounts to not taking credit. The Hon ble High Court in the said decision in para 20, inter-alia, says as below:- 20. Therefore, this is a procedure whereby the manufacturers can utilise the credit to make payment of duty to discharge his liability. Before utilization of such credit, the entry has been re .....

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