TMI Blog2015 (11) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... I 6 - Supreme Court) and Hon’ble High Court of Bombay in the case of CCE, Pune-I vs. GL & V India Pvt. Ltd. (2015 (5) TMI 375 - BOMBAY HIGH COURT) make the position clear that one cannot do away with the wording ‘OR’ as appeared in Rule 14 twice prior to the watermark date 1.4.2012 and one cannot replace the said wording ‘OR’ with the wording ‘AND’ and reading it so. Respondent viz., Commissioner of Central Excise and Service Tax, LTU, Bangalore has not been given any evidence other than the fact of taking wrong or erroneous CENVAT credit to prove appellant’s intention to evade payment of service tax. When no intention to evade payment of service tax is proved beyond doubt it will not be right to impose penalty on the appellant under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest and equivalent penalty. 3.1 The learned advocate citing the Honble Madras High Court s decision in the case of CCE, Madurai vs. Strategic Engineering (P) Ltd.: 2014 (310) E.L.T. 509 (Mad.) says that Honble Madras High Court clarified that as the Rule 14 of CENVAT Credit Rules was subsequently amended, they do not have liability of any interest and penalty unless the CENVAT credit taken is utilized by them. He says that as they did not utilize certain portion of their CENVAT credit, in that case, interest and penalty is not liable to be paid by them. In support, he is also citing decision of the Honble Karnataka High Court in the case of CCE S.T., LTU, Bangalore vs. Bill Forge Pvt. Ltd. decided on 5.4.2011 and reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is decision quoted and followed the Hon ble Supreme Court decision made in the case of Ind-Swift (supra). He further argues that the decision of Hon ble Madras High Court in the case of CCE vs. Strategic Engg. (supra) was also quoted and considered by Hon ble Bombay High Court. 5. After considering the facts on record and the submissions of both the sides, it is found that the date 1.4.2012 is the watermark i.e., the activities and the operations of an assessee (manufacturer or service provider) have to follow the provisions of Rule 14 of CENVAT Credit Rules as they existed then (before 1.4.2012); and after 1.4.2012 when the subject amendment was made, an assessee would be entitled to the benefit as provided by the said amendment. The Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word OR appearing in Rule 14, twice, could be read as AND by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word OR in between the expressions taken or utilized wrongly or has been erroneously refunded as the word AND. On the happening of any of the three aforesaid circumstances such credit bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter back to the Tribunal for consideration on merits. The Hon ble High Court of Bombay in this case inter alia stated as below: 16. In so far as the judgment passed by the Madras High Court is concerned, the Madras High Court has taken a view that mere taking of Cenvat credit facility is not at all sufficient for compelling the assessee to pay interest as well as penalty. With great respect to the Hon ble Judges of the Madras High Court, we may say that this is not what has been held by their Lordships of the Apex Court. The Apex Court has in clear terms held that the interpretation as paced by the Punjab and Haryana Court for invoking the provisions of Rule 14, there has to be taking as well as utilizing is not correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax. When no intention to evade payment of service tax is proved beyond doubt it will not be right to impose penalty on the appellant under Section 78 read with Rule 15(3) of CENVAT Credit Rules, 2004. Consequently on the issue of penalty, the appellant deserves relief and the impugned order in respect of penalty imposed on the appellant is hereby set aside. 8. Considering the facts on record and the discussions made above and the decisions of the Hon ble Supreme Court and Hon ble Bombay High Court quoted above, appeal does not succeed on the issue of interest but the appellant will get relief on the penalty part as the penalty imposed on them has been set aside by this order. 9. The appeal decided and disposed of in above ter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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