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M/s. Sandoz Pvt. Ltd. Versus Commissioner of Central Excise, Raigad

2015 (11) TMI 774 - CESTAT MUMBAI

Demand of interest on reversal of CENVAT Credit - Invocation of extended period of limitation - Interest u/s 11AB - Penalty u/s 11AC - Held that:- The availment of inadmissible credit was never disclosed by the appellant to the department before the audit therefore department was not in position to ascertain whether the credit taken by the appellant is correct or wrong. In view of this position it can be conveniently concluded that there is clear suppression of fact on the part of the appellant .....

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hargeable from the date of taking credit in the Cenvat account of the appellant. As regard imposition of penalty under Section 11AC, as I held above extended period is rightly invoked and demand was also rightly confirmed by invoking proviso to Section 11A(1) the provision of Section 11AC would unavoidably attract and accordingly penalty under Section 11AC is sustainable. Even as per Hon’ble Supreme Court judgment in the case of Dharamendra Textile processor[2008 (9) TMI 52 - SUPREME COURT] pena .....

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2 passed by the Commissioner of Central Excise (Appeals-II) Mumbai, wherein Ld. Commissioner(Appeals) has upheld the Order-in-Original No. Raigad/ADC/162/11-12 dated 17/1/2012 and rejected the appeal of the appellant. The fact of the case is that appellant has wrongly availed Cenvat Credit amounting to ₹ 6,31,914/- however the same was reversed on pointing out by the audit. As regard the admissibility of the credit, the appellant has reversed the credit and not contested on merit. However, .....

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balance of Cenvat Credit more than ₹ 4 crores in their Cenvat account, therefore there can not be any intention to wrongly avail a small amount of ₹ 6,31,914/- therefore demand is not sustainable on the ground of time bar. As regard interest he submits that as against credit of ₹ 6,31,914/- they had accumulated balance amount of ₹ 4 crores and disputed credit was not utilized till the date of reversal. He submits that interest is applicable only from date of utilization o .....

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g such wrong credit on their part and they had accumulated balance of more than ₹ 4 crores which shows their banafide belief. In view of this position proviso to Section 11A(1) is not invokable and consequent penalty under Section 11AC also not imposable. 3. On the other hand, Shri. Rakesh Goyal, Ld. Addl. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings in the impugned order. He further submits that as regard wrong availment of credit on the input services, no .....

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atories Ltd. [2011(265) E.L.T. 3(S.C.). As per this judgment interest is chargeable from the date of credit taken. He also refers to the Rule 14 of Cenvat Credit Rules, 2004 wherein it is clearly provided that interest shall be recovered where Cenvat Credit has been taken or utilized wrongly or has been erroneously refunded. In view of this unambiguous rule, interest is chargeable from the date of taking credit in to Cenvat account therefore interest was correctly demanded. As regard penalty he .....

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have observed that wrong availment of credit was pointed out by the audit officer during the audit. The availment of inadmissible credit was never disclosed by the appellant to the department before the audit therefore department was not in position to ascertain whether the credit taken by the appellant is correct or wrong. In view of this position it can be conveniently concluded that there is clear suppression of fact on the part of the appellant and therefore extended period was rightly invo .....

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11AB of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries. From plain reading of the Rule 14, it is very clear that interest is chargeable under Section 11AB where the Cenvat credit has been taken or utilized, wrongly refunded. In all the three stages i.e.  credit taken, credit utilized or wrongly refunded interest is chargeable. In the present case, since the appellant has taken wrong credit even though not utilized as per the .....

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