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M/s The Simbhaoli Sugar Mills Ltd. Versus Commissioner of Central Excise, Meerut II

2016 (6) TMI 273 - CESTAT ALLAHABAD

Recovery of interest for the Cenvat credit wrongly taken, but not utilized - Held that:- There is no liability on the appellant assessee to pay interest; consequently, the appeal is allowed in favour of assessee. - Ex. Appeal No.2243/06 - Dated:- 23-2-2016 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. ASHOK KUMAR ARYA, MEMBER (TECHNICAL) For the Petitioner : Shri Rajesh Chibber, Advocate For the Respondent : Shri D. K. Deb, Asstt.Commr. (A.R.) ORDER PER MR. ASHOK KUMAR ARYA : Both the parties .....

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credit taken or utilized wrongly were replaced by Cenvat credit taken and utilized, saying that when they did not utilize the Cenvat credit liability of interest cannot be fixed against them. 3.1 The appellant also cites following case laws in support of their stand : (i) Commr. of Central Excise, Allahabad : Balrampur Chinni Mills Ltd. : 2014 (300) ELT 449 (Tri.-Del.) ; (ii) GTL Infrastructure Ltd. Vs. Commr. of Service Tax, Mumbai : 2015 (37) STR 577 (Tri.-Mumbai) ; (iii) Commr. of Central Ex .....

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X (DB) dt. 20th July, 2015 (M/s Simbhaoili Sugar Mills Ltd. Vs. CCEx.,Meerut II), wherein it was held that the appellant was not liable to pay interest on wrongly taken Cenvat credit, when later it was reversed. 4. The Revenue represented by ld.A.R., Shri D.K.Deb, vehemently argues that there is a liability of interest on the appellant namely, M/s The Simbhaoli Sugar Mills Ltd., even when they have not utilized wrongly taken Cenvat credit. In support, he cites the case law in the case of Bharat .....

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th the sides. The appellant is a manufacturer of sugar and had taken wrong Cenvat credit of ₹ 4 lakhs (approx.) on various goods, which were later on found not entitled to the said Cenvat credit. When it was pointed out so by Audit, the appellant immediately reversed the wrongly taken Cenvat credit. It has been found that there was no malafide intention in this regard on the part of the appellant. The liability of interest for which SCN was issued is about ₹ 59,895/- only. 5.1 The ma .....

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t has cited case laws in their favour given above, we find that the Revenue has also cited the case law given earlier in its support. 5.1.1 It is on record that the Hon ble Supreme Court in the case of Union of India Vs. Indo-Swift Laboratories Ltd. : 2011 (265) ELT 3 (S.C.), held that liability of interest would lie, even in case where cenvat credit was wrongly taken though not utilized. We find that in case of Indo-Swift Laboratories Ltd., the facts are that the assessee had taken Cenvat credi .....

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2 ..The case in hand although the appellant has taken the Cenvat Credit, the same has been reversed on pointing out therefore the facts of this case are similar to the case of Bill Forge Pvt. Ltd. (supra) and distinguishable from the facts of the case of Ind-Swift Laboratories Ltd. (supra), as in the case of Ind-Swift Laboratories Ltd. (supra), the Cenvat Credit was taken by the assessee on the strength of fake invoice and credit was not reversed by them but it was recovered by way of demanding .....

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and in Commissioner of C. Ex. Allahabad v. Balrampur Chini Mills Ltd. - 2014 (300) E.L.T. 449 (Tri. - Delhi). 5.1.2 The Hon ble Karnataka High Court also in the case of M/s Bill Forge Pvt. Ltd. (cited supra) has distinguished the case of M/s Ind-Swift Laboratories (cited supra) and has held that mere wrong availament of Cenvat credit does not attract interest liability. The Karnataka High Court in this case, inter-alia, has observed as under : 20. From the aforesaid discussion what emerges is th .....

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