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2016 (11) TMI 511 - CESTAT CHENNAI

2016 (11) TMI 511 - CESTAT CHENNAI - TMI - Recovery of improperly availed CENVAT credit - Rule 3 (1) and Rule 9 (1) of Cenvat Credit Rules, 2004 - Held that: - the appellants have reversed the credit based on a wrong advice at the time of internal audit which subsequently was found to be wrong and accordingly they took re-credit. This is only a technical adjustment. I find that the issue at hand is fully covered by decision of this very Tribunal in the case of Godrej Sara Lee Ltd. Vs CCE Pune [2 .....

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hu Mohan Damodhar, Member (Technical) Shri N. Viswanathan, Advocate For the Appellant Shri R. Subramaniyan, AC (AR) For the Respondent ORDER The facts of the case are that appellant, on being pointed out by internal audit of the department of excess credit availed by them, had reversed an amount of ₹ 17,52,664/- with interest on 2.4.2009. As per the learned counsel, the said reversal of credit was advised by department, on the ground that the total credit availed was more than the calculat .....

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d Rule 9 (1) of Cenvat Credit Rules, 2004. Original authority has confirmed the proposed demand which has been upheld by the Commissioner (Appeals) also. Hence this appeal. 2. Ld. Counsel submits that the credit taken by them was very much in order since it was part of the original invoice against which the credit was passed on to them by their sister unit. The amount was initially reversed only because of being wrongly advised that the same was incorrectly calculated. He placed reliance on the .....

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vice at the time of internal audit which subsequently was found to be wrong and accordingly they took re-credit. This is only a technical adjustment. I find that the issue at hand is fully covered by decision of this very Tribunal in the case of Godrej Sara Lee Ltd. Vs CCE Pune 2012 (26) STR 417 (Tri.-Chennai). The relevant portions of the above Tribunal's order are reproduced herein for reference :- "6. However, I find that the present case is quite different. This is a case where the .....

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earlier Service Tax Credit Rules, 2002. As such, the audit objection and the subsequent instruction of the departmental authorities which prompted the appellants to reverse the credit and pay the interest were clearly wrong. The Board has also accepted this position, while issuing a subsequent circular, dated 23-8-2007 in paragraph 8.3 thereof. As such, the erroneous reversal made by the appellants, prompted by wrong audit objection and an inapplicable circular, has been rectified by the appell .....

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