TMI Blog2019 (9) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... ued alleging wrong availment of cenvat credit to the tune of ₹ 1,67,112/- Light Diesel Oil in the month of August, 2007. On an objection being raised by CERA, the appellant assessee reversed the amount in the month of July, 2009 to their credit account. Show cause notice sought, (i) to appropriate the amount already reversed ; (ii) to charge interest and (iii) to impose penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The Adjudicating Authority disallowed the cenvat credit of ₹ 1,67,112/- and confirmed the demand of duty and appropriated the amount of ₹ 1,67,112/- already reversed by the appellant assessee in July, 2009. He also confirmed the demand of interest and imposed penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. On appeal, the Ld.Commissioner (Appeals) upheld the order of the Adjudicating Authority and rejected the appeal. Hence, the present appeal before the Tribunal. 2. The Ld.Counsels appearing on behalf of the Appellant Company, submitted a synopsis and a written submission along with a compilation of statutory provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taka High Court observed inter alia, as follows. 19 Rule 14 of the CENVAT Credit Rules, 2004 reads as under:- Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded. When the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacture 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 aforesaid provisions makes it very clear that the said provision is attracted where the Cenvat Credit has been taken or utilized wrongly or has been erroneously refunded. In view of the aforesaid judgment of the Apex Court, the question of reading the word and in place of or would not arise. It is also to be noticed that in the aforesaid Rule, the word avail is not used. The words used are taken or utilized wrongly. Further the said provision makes it clear that the interest shall be recovered in terms of Section 11A and 11B of the Act . 20. From the aforesaid discussion what emerg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As he had taken credit in a sum of ₹ 11,691-00, a sum of ₹ 154-00 was the interest payable from the sate the duty was payable, which they promptly paid. The claim of the Revenue was, though the assessee has not taken or utilized this Cenvat credit, because they admitted the mistake, the assessee is liable to pay interest from the date the entry was made in the register showing the availment of credit. According to the Revenue, once tax is paid on input or input service or service rendered and a corresponding entry is made in the account books of the assessee, it amounts to taking the benefit of Cenvat credit. Therefore interest is payable from that date, though, in fact by such entry the Revenue is not pt to any loss at all. When once the wrong entry was pointed out, being convinced, the assessee has promptly reversed the entry. In other words, he did not take the advantage of wrong entry. He did not take the Cenvat credit or utilized the Cenvat credit. It is in those circumstances the Tribunal was justified in holding that when the assessee has not taken the benefit of the Cenvat credit; there is no liability to pay interest. Before it can be taken, it had been rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - . The purchasers have reversed the Cenvat Credit in their Cenvat account of ₹ 9,31,360/-, therefore, the Assessee was entitled for the refund of excess amount paid in accordance to the provisions of the Act. Instead of claiming refund separately, the Assessee has taken Cenvat Credit of the said amount in the Cenvat account. Such amount credited in the Cenvat account was available for the payment of duty but the same was not utilized for payment of duty and subsequently, the Assessee has reversed the Cenvat Credit entry in the Cenvat account. The Apex Court in the case of Commissioner of Central Excise, Mumbai-I v. Bombay Dyeing Manufacturing Company Limited, reported in 2007 (215) E.L.T. 3 (S.C.) has held that where before the utilization of the credit amount if the entry is reversed it amounts to not taking credit. Once the credit is reversed before its utilization in the Cenvat account it does not amount to taking of credit. Thus, the provisions of Rule 14 of Cenvat Credit Rules and Section 11AB of the Act are not attracted and neither the penalty nor the interest is chargeable. The Division Bench of Punjab Haryana High Court in the case of Commissioner of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly, but reversed before the same is utilized, it amounts to not taking credit. Accordingly, when no credit is taken, the provisions of Rule 14 of the Rules would not be attracted. The view adopted by the Tribunal as well as the authorities below is, therefore, in consonance with the view taken by the Supreme Court in the above referred decision. (vi) The above decision was also followed by Hon'ble High Courts in following judgment: (a) Steelco Gujarat Ltd. Vs UOI [2012 (285) E.L.T. 161 (Bom.)] (b) CCE C Vs. Sweet Industries 2011 (264) E.L.T. 349 Guj.) (c) CCE Vs. Ashoka Metal Dicor (P) Ltd. [2011 (21) S. T. R. 469 (All.)] (vii) Hon'ble Punjab Haryana High Court in the case of CCE Vs. MarutiUdyog Ltd., [reported in 2007 (214) E.L.T. 173 (P H) has held that the Assessee is not liable to pay interest as the credit was only taken as an entry in the Modvat record and was not in fact utilized. Against the decision, the Special leave to Appeal (Civil) No. CC3915/2007 filed by Revenue, was rejected by the Hon'ble Apex Court [2007 (214) E. L. T. A50 (S.C.)] . (viii) The Hon'ble Madras High Court in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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