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2015 (12) TMI 808 - ANDHRA PRADESH HIGH COURT

2015 (12) TMI 808 - ANDHRA PRADESH HIGH COURT - 2016 (331) E.L.T. 182 (A. P.) - Demand of interest on reversal of CENVAT Credit - Credit on inputs used in manufacture of exempted goods - whether in terms of Rule 14 of the Cenvat Credit Rules, 2004, the appellant can be said to have taken credit wrongly - Held that:- When the credit was not taken wrongly, the question of payment of interest does not arise. In this case, the circumstances discussed above show that the appellant could not have acte .....

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ayment of interest does not arise in terms of provisions of Rule 14 of C.C.R. 2004. In these circumstances, we do not find that the appellant is liable to pay interest since credit taken by them is not wrong in the first place.

It is obvious that in March, 2010, the appellant in accordance with the relevant provision of law, did seek clarification from the department to know whether the goods on clearance to the respondent-assessee are exempted from payment of excise duty in terms of .....

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t, as such, they are liable to pay interest, is not sustainable. - there is no perversity in the order of the Tribunal and it is purely a question of fact and there is no question of law much less substantial question of law warranting interference by this Court. - Decided against Revenue. - C.E.A. No. 107 of 2015 - Dated:- 8-10-2015 - G. Chandraiah And Challa Kodanda Ram, JJ. For the Appellant : Ms. P. Sarada, Senior SC for Customs and Central Excise For the Respondent : N.A JUDGMENT ( Per Hon .....

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provision vide Rule 6(1) of Cenvat Credit Rules, 2004, can be held as not wrongly taken, going by extraneous facts and circumstances, as done by the Hon ble Tribunal in the instant case? ii) Whether, when it is an admitted and undisputed fact of the case that the Credit taken by the respondents was not eligible to be taken in view of Rule 6(1), the interest liability thereon could be waived by the Hon ble Tribunal by holding that the Credit was not wrongly taken and disregarding the Hon ble Supr .....

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o manufactured Pistols, Missiles and Rocket Motor Tubes falling under chapter Heading No. 93020000 and 93069000 of the Central Excise Tariff Act, 1985, is working under the Ministry of Defence. In terms of Sl.No.2 of the Notification No.63/95-Central Excise dated 16-03-1995, as amended, all goods, if manufactured by M/s. B.D.L. i.e. the respondent assessee for supply to the Ministry of Defence for official purpose are fully exempted from payment of central excise duty. While so, a Show Cause Not .....

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Rules). Demand of interest on that amount was also confirmed in terms of Rule 14 of the Rules read with Section 11AB of the Central Excise Act, 1944 (for brevity the Act), however no penalty was imposed by the adjudicating authority. Aggrieved by the Order-in-Original, the assessee filed an appeal, and the Tribunal, by its Final Order dated 22-10-2013, allowed the appeal. Challenging the order of the appellate authority, the Department has preferred the present appeal. Ms. P. Sarada, learned se .....

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een utilized by them and the same has been reversed, however the Tribunal has traversed beyond the scope of the dispute before it by holding that the credit was not wrongly taken by the assessee. She has further contended that Cenvat credit was undisputedly taken wrongly by the respondent-assessee contrary to the statutory provision of Rule 6(1) of the Rules, as such, they are liable to pay interest thereon from the date of taking such credit in terms of Rule 14 of the Rules. While submitting a .....

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ct in justifying that the credit was not taken wrongly by placing more importance to the circumstances under which the assessee had taken the credit. Those circumstances, in any case, cannot have weightage to the extent of over-riding a statutory provision barring the taking of credit on inputs used in exempted goods. We have heard the learned senior Standing Counsel for Customs and Excise appearing for the appellant and perused the material placed on record. The Tribunal, in its order dated 22. .....

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e Cenvat credit in September, 2010 since some of the job workers did not return all the inputs within 180 days and they had to reverse the credit. To reverse the credit, they had to take credit. When there was no clarification received from the department till March, 2011, the assessee had no option but to clear two consignments in March, 2011 on payment of excise duty of ₹ 90,94,851/- by utilizing the Cenvat Credit. On getting the clarification from TRU in April, 2011, the appellant rever .....

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taken without eligibility and therefore asking them to pay interest was not correct. Moreover, any assessee, if he has any doubt, has a right to ask the department and such action is not contrary to the provisions of law. Further, in the circumstances of this case, it cannot be said that the credit had been taken by the appellant wrongly. When credit is not taken wrongly, the question of payment of interest does not arise in terms of provisions of Rule 14 of C.C.R. 2004. In these circumstances, .....

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