Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s. TNT (India) Pvt Ltd Versus Commissioner of Central Excise and Service Tax Bangalore-III

Demand of interest on reversal of cenvat credit - reversal of credit against refund claim - The appellant vehemently argues that their initial excess payment of service tax on receipt of input services from their foreign counterpart was unintentional and mainly because of wrong calculations; after the payment of the excess service tax they had taken the CENVAT credit for the same. - Held that:- strictly speaking do not clearly prove that the CENVAT credit taken on the excess payment of service t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

HOK K. ARYA, TECHNICAL MEMBER For the Petitioner : Mr. N. Anand, Advocate For the Respondent : Mr. Mohammed Yousaf, Addl. Commissioner (AR) ORDER PER : ASHOK K. ARYA Both the parties have been heard in detail. 2. The issue concerns with initial excess payment of service tax by the appellant-assessee and thereafter taking CENVAT credit of the said excess payment which has been found to be irregular/wrong . The assessee later on filed a refund claim for the same. The department accepted the refund .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

recovery of interest is provisions of Rule 14 of CENVAT Credit Rules, 2004 as existed during the relevant period. The appellant vehemently argues that their initial excess payment of service tax on receipt of input services from their foreign counterpart was unintentional and mainly because of wrong calculations; after the payment of the excess service tax they had taken the CENVAT credit for the same. 3. The learned advocate appearing for the appellant points out the main facts of the case as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment vide C. No.V/18/ST/308/2009 GLT.1 asking the appellant to reverse Cenvat credit for consideration of the refund claim. 5 13.11.2009 Letter of the appellant informing the department regarding reversal of Cenvat. 6 15.01.2010 Order-in-Original No.11/R/2010/LTU passed by the Assistant Commissioner-LTU sanctioning the refund. 7 05.10.2010 Show-cause notice was issued proposing for recovery of interest and imposition of penalty. 3.1 The learned advocate argues that provisions of Rule 14 mentions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Forge Pvt. Ltd.: 2012 (279) E.L.T. 209 (Kar.) saying that as per this judgment no interest liability or penalty is attracted for this transaction of taking CENVAT credit for the excess payment made of the service tax. He also further cites the following case laws in support:- (i) CCE vs. Pearl Insulation Ltd.: 2012 (281) E.L.T. 192 (Kar.) (ii) CCE vs. Gokaldas Images (P) Ltd.: 2012 (28) S.T.R. 214 (Kar.) (iii) CCE vs. Strategic Engineering (P) Ltd.: 2012 (310) E.L.T. 509 (Mad.) 4. The learned A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s the Hon ble Supreme Court s judgment in the case of UOI vs. Ind-Swift Laboratories Ltd.: 2011 (265) E.L.T. 3 (S.C.). 5. There is no dispute about the facts on record. The appellant-assessee accepts that they have taken the CENVAT credit but they say that it was not wrong; however, the Revenue says that as per law this was a wrong CENVAT credit taken by the appellant-assessee attracting the provisions of Rule 14 of CENVAT Credit Rule, 2004. 5.1 The appellant argues that they took the CENVAT cre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Supreme Courts decision in the case of UOI vs. Ind-Swift Laboratories (supra) saying that in the present case the appellant has wrongly taken the credit and whether the CENVAT credit is utilized or not is immaterial and as per this decision of the Honble Supreme Court, recovery along with interest is rightly attracted. However, I find that the facts in the cited case, where Union of India filed appeal before the Honble Supreme Court was based on the illegal CENVAT credit taken based on the i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ain strictly speaking it is a technical flaw, which had occurred mainly on account of wrong calculation. It is on record that the said CENVAT credit was based on actual payment of service tax, though in excess, and on no occasion the appellant-assessee utilized the same as throughout the relevant period, the appellant-assessee had the balance amount in their CENVAT Account more than the CENVAT credit amount in question. Considering the facts of the case quoted by the Revenue, I am of the conside .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

High Court s decision in the case of CCE vs. Bill Forge (supra) quoted by the appellant categorically says that interest liability would arise only when duty legally due to the Government is not paid. In this regard, let us refer to the Hon ble Karnataka High Court s above decision; it has inter alia held as below: 20. From the aforesaid discussion what emerges is that the credit of excise duty in the register maintained for the said purpose is only a book entry. It might be utilised later for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t. Instead of paying excise duty, the cenvat credit is utilized, thereby it is adjusted or set off against the duty payable and a debit entry is made in the register. 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 reversed, it amounts to not taking credit. Reversal of cenvat credit amounts to non-taking of credit on the inputs. (emphasis supplied) 21. Interes .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed or short paid or erroneously refunded, the 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. 5.4 From the above it is clear that as there has been no liability to pay service ta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, where provisions of Rule 14 of CENVAT Credit Rules, 2004 are not strictly attracted. 5.6 When the said technical fault was noticed and the department asked the appellant to furnish CENVAT credit statement showing the availment of credit on 8.9.2009, the appellants vide their letter dated 21.9.2009 furnished the details of CENVAT credit along with their refund claim application. The department asked the appellant vide letter dated 10.11.2009 to reverse the CENVAT credit for consideration of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Updates     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version