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2015 (4) TMI 1029 - CESTAT CHENNAI

2015 (4) TMI 1029 - CESTAT CHENNAI - TMI - Levy of interest on Reversal of cenvat credit - Held that:- Adjudicating authority has demanded credit interest of ₹ 50,827/- and imposed penalty of ₹ 10,000/- which was set aside by the Commissioner (Appeals) in the impugned order. On perusal of the order, I find that the LAA by relying on the Tribunal s decisions against TATA Motors Ltd. Vs CCE Jamshedpur [2004 (8) TMI 276 - CESTAT, KOLKATA] and Gokulam Spinners Vs CCE [2004 (9) TMI 648 - .....

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ndo-Swift laboratories Ltd. - [2011 (2) TMI 6 - Supreme Court]. - ratio of the Tribunalís decision and the Hon ble High Court decisions are squarely applicable to the present case. Therefore, I hold that respondents are not liable for interest on the credit already reversed. Accordingly, the impugned order is upheld - Decided against Revenue. - Appeal No.E/284/2006 & E/CO/40243/2014 - FINAL ORDER No.41008/2015 - Dated:- 24-4-2015 - Shri R. Periasami, Technical Member For the Petitioner : Shri B. .....

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nts are not eligible to avail cenvat credit. The appellants have already reversed the credit of ₹ 50,000/- and ₹ 17,58,244/-. However, the adjudicating authority issued SCN demanding interest on the irregular availment of cenvat credit and confirmed the interest of ₹ 50,827/- under Rule 12 read with Section 11AB and also imposed penalty of ₹ 10,000/-. On appeal, the Commissioner (Appeals) by relying on Tribunal s Larger Bench decision set aside interest and penalty. The s .....

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ollowing case laws :- (i) CCE Chennai-IV Vs Sundaram Fasteners Ltd. 2014-TIOL-20SC-MAD-CX (ii) UOI Vs Ind-Swift Laboratories Ltd. 2012 (25) STR 184 (SC) 4. On the other hand, Ld. Advocate for the respondent reiterates the findings of the impugned order and also cross objections. He submits that the CVD credit availed in March 2004 and September 2004 were not utilized it was remaining in the balance and immediately they reversed the credit in Nov-04. Therefore, the Commissioner (Appeals) has righ .....

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I find that the issue in this appeal only relates to demand of interest on the credit already reversed by the appellant. The adjudicating authority has demanded credit interest of ₹ 50,827/- and imposed penalty of ₹ 10,000/- which was set aside by the Commissioner (Appeals) in the impugned order. On perusal of the order, I find that the LAA by relying on the Tribunals decisions against TATA Motors Ltd. Vs CCE Jamshedpur 2005 (120) ECR 371 (Tri.-Kolkata) and Gokulam Spinners Vs CCE 2 .....

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STR 184 (SC). The relevant paragraphs of the Tribunal's Principal Bench decision are reproduced below :- "7. It is seen that the Hon ble Karnataka High Court in the case of M/s. Bill Forge Pvt. Ltd. has discussed and considered the judgment of Honble Supreme Court in the case of M/s. Indo-Swift Laboratories (supra) in quite some detail in Paras 16 to 20 and then goes on to enumerate the principle of charging interest in Para 21 which is quoted below :- 21. Interest is compensatory in c .....

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he person liable to pay duty, shall in addition to the duty is liable to pay interest. Section do not stipulate interest is payable from the date of book entry, showing entitlement of Cenvat credit. Interest cannot be claimed from the date of wrong availment of Cenvat credit and that the interest would be payable from the date Cenvat credit is taken or utilized wrongly. Thus, the averment by the Honble Single Member of CESTAT in case of Dr. Reddys Laboratories Ltd. (supra) that the Honble Kar .....

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f these sentences did not exist, the findings would not be affected either way as is evident from the holistic reading of Paras 16 to 20 of the said judgment. Further Honble Karnataka High Court judgment would not become incuriam merely because it has not discussed, analyzed or distinguished the judgment of the Honble Supreme Court in case of M/s. Indo-Swift Laboratories in a manner or to the extent some other Court would have chosen to do. Thus, we find that the said judgment of the Honble K .....

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ly to the facts of the present case. In the case of Bill Forge Pvt. Ltd. (supra) appellant therein took the credit and also reversed the credit within the same month i.e. before any liability to pay any duty arose. Thus what is contended is that the Karnataka High Court judgment (supra) would be applicable only when the credit is reversed within the same months i.e. before any liability to pay duty arose. It is difficult to accept that this distinction in the facts is of any consequence because .....

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ise. Thus, reversal before utilization of wrongly taken Cenvat credit within the same month or before any liability to pay duty arose in no way affects or impacts the reasoning or principle contained in the judgment of Honble Karnataka High Court is the case of Bill Forge Pvt. Ltd. It needs to be stated that when a judgment is sought to be distinguished on the grounds of different facts, it has to be brought out that the difference in the facts is such as would have material effect on the findi .....

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