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M/s. Grasim Bhiwani Textiles Ltd. Versus CCE, Rohtak

2016 (2) TMI 361 - CESTAT NEW DELHI

Admissibility of credit of service tax paid on input service used in the manufacture of exempted as well as dutiable goods - demand of interest and imposition of penalty - Held that:- The demand of interest is countered by the learned Counsel by putting forward the contention that the credit was reversed prior to the utilization. Opening and closing balance of the credit amount pertaining to the respective months substantiates this contention put forward by the appellant. The judgements relied u .....

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id in these judgements, we hold that as the credit has been reversed before utilization, the demand of interest is unsustainable.

Imposition of penalty - Interestingly, it is seen stated in the show cause notice that the same is issued invoking the extended period of limitation. As per records, the department has come to know about wrongful availment of credit and informed the appellants the same on 9.8.2007. The show cause notice is dated 24.1.2008 which in our view is within the per .....

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he same. On such score, we hold that the respondent have miserably failed to establish suppression or mis-statement with intention to evade payment of duty on the part of the appellants. Pursuant to the above reason, we are of the considered view that the imposition of penalty is unwarranted. - Appeal No. E/2181/2008-EX(DB) - Final Order No.53150/2015 - Dated:- 7-10-2015 - SMT. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND MR. B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri Amit Jain, .....

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d products from their unit and were also availing credit of service tax paid on input service. The appellants did not maintain separate account as provided under Rule 6 of Cenvat Credit Rules, 2004 and the department therefore observed that the credit availed on the input service was not admissible to the appellants. The Range Superintendent vide letter dated 9.8.2007 informed the same to the appellants. On pointing out the defects, the appellants reversed the credit amount of ₹ 65,21,123/ .....

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earing, learned Counsel Shri Amit Jain submitted that though inadmissible credit is also challenged in the appeal, he presently confines his argument with regard to the demand of interest and imposition of penalty. He submitted that the appellant has reversed the credit on pointing out the same by the department. He placed reliance on the details of credit balance for the respective months and argued that the credit has been reversed prior to utilization and therefore such reversal would amount .....

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ted that there was no suppression or wilful mis-statement on the part of the appellants. He drew our attention to the letter dated 4.7.2006 issued by the appellant to the department informing the department the intention of the appellant to make clearance under Notification No.29/2004-CE and 30/2004-CE both dated 9.7.2004. In this letter, the appellants also informed the department the manner of taking credit on inputs, capital goods and input service. Further, on request of the department, the .....

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interest and imposition of penalty, we do not enter into the merit of the case. The demand of interest is countered by the learned Counsel by putting forward the contention that the credit was reversed prior to the utilization. Opening and closing balance of the credit amount pertaining to the respective months substantiates this contention put forward by the appellant. The judgements relied upon by the learned counsel analyses the issue of payment of interest in the case of reversal of credit. .....

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