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2016 (3) TMI 709 - CESTAT MUMBAI

2016 (3) TMI 709 - CESTAT MUMBAI - 2016 (344) E.L.T. 417 (Tri. - Mumbai) - Recovery of interest on the cenvat credit wrongly taken - Held that:- Where the cenvat credit is taken or utilized or erroneously refunded, the same along with interest should be recovered from the manufacturer or the provider of output service and the provisions of Section 11A and 11AB shall apply mutatis mutandis for effecting such recoveries. The recovery of interest is under Rule 14. Only the mode of recovery is as pr .....

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ay interest would accrue. - Therefore hold that the appellant is liable to discharge interest liability paid subsequently under protest to the respondent. - Decided against assessee. - Appeal No. E/992/10-Mum - A/85796/16/SMB - Dated:- 15-2-2016 - MR. S.S. GARG, MEMBER (JUDICIAL) For the Petitioner : Shri S. Narayanan, Advocate For the Respondent : Shri Sanjay Hasija, Superintendent (AR) ORDER This appeal is directed against order-in-original No. 06/CEX/2010 dated 5.3.2010 passed by Commissi .....

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documents and thereafter on their own in the month of March 2009, reversed the same and informed the Range Superintendent vide letter dated 19.5.2009. The department issued show cause notice dated 16.9.2009 asking to explain as to why wrongly availed serviced tax credit amounting to ₹ 1,46,72,686/- should not be demanded and recovered under Rule 14 of the Cenvat Credit Rules, 2004 and penalty under Rule 15(3) and interest amounting to ₹ 9,51,112/- should not be recovered under Rule 1 .....

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2B). Aggrieved by the same, the appellant has filed the present appeal. 3. The learned counsel for the appellant submitted that the appellant had taken the credit twice inadvertently without intention to evade against the same documents in the month of September 2008 and after detection of their mistake, reversed the same voluntarily in March 2009 and thereafter informed the Range Superintendent accordingly. It is his further contention that the appellant during the relevant period had sufficien .....

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e Ltd. vs. CST, Mumbai reported in 2015 (37) STR 577 (Tri.-Mum.); (ii) CCE, Madurai vs. Strategic Engineering (P) Ltd. reported in 2014 (310) ELT 509 (Mad.); (iii) Gurmehar Construction vs. CCE, Raipur reported in 2014 (36) STR 545 (Tri.-Del.); (iv) Oswal Cable Products vs. CST, Delhi-I reported in 2015 (38) STR 437 (Tri.-Del.); (v) Dharampal Premchand Ltd. vs. CCE, Noida reported in 2014 (309) ELT 508 (Tri.-Del.); (vi) CCE, Raipur vs. Sharda Energy & Minerals Ltd. reported in 2013 (291) ELT .....

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-Swift Laboratories Ltd. reported in 2011 (265) ELT 3 (SC) will not apply as the appellant has not utilized the credit and therefore the question of recovery of any cenvat credit would not arise at all. On the other hand, he places reliance on the decision of the Honble High Court of Karnataka in the case of CCE, Bangalore vs. Bill Forge Pvt. Ltd. reported in 2012 (279) ELT 209 (Kar.), wherein it was held that if credit is taken and reversed without utilization for payment of excise duty, no in .....

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reme Court in the case of Ind-Swift Laboratories Ltd. (supra) held that interest liability would arise even if cenvat credit is taken though not utilized in terms of the provisions of Rule 14 of the Cenvat Credit Rules, 2004 and therefore the ratio of the said decision would prevail over the decision of the Hon ble Karnataka High Court. In support of his argument, he placed reliance on the following decisions:- (i) CCE, Pune-I vs. GL & V India Pvt. Ltd. reported in 2015 (321) ELT 611 (Bom.); .....

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cision is per incuriam inasmuch as the said decision did not take into consideration the provisions of Rule 3 of the Cenvat Credit Rules, 2004, which provided for taking of the credit as soon as the inputs are received and the utilization of the credit immediately thereafter without any co-relation to the output to be produced from the inputs received. Accordingly he pleads that the appellant is liable to pay interest as held by various decisions of the Tribunal cited supra as well as the recent .....

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en or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of Sections 11A and 11AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries. A reading of the Rule makes it clear that where the cenvat credit is taken or utilized or erroneously refunded, the same along with interest should be recovered from the m .....

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on ble Supreme Court noted that since the Rule covers both the situations i.e. cenvat credit taken or utilized wrongly and the word or is disjunctive in nature, even if the credit has been availed wrongly, the liability to pay interest would accrue. It is pertinent to note that the Hon ble Bombay High Court in the case of GL & V India Pvt. Ltd. (supra) has observed as under:- 12. It could thus clearly be seen that while interpreting Rule 14 the Apex Court has clearly held that if the interpr .....

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of the Punjab & Haryana High Court, would no longer be correct in view of the subsequent judgment of the Apex Court in the case of Union of India v. Ind-Swift Laboratories Ltd. reported in 2011 (265) E.L.T. 3 (S.C.). 15. In so far as the judgment of the Karnataka High Court is concerned, it appears that the said judgment is delivered by the Karnataka High Court on the facts of the said case. It would be relevant from the facts as stated in the said judgment that upon the mistake being broug .....

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