TMI Blog2019 (10) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... liability would not arise. It is not disputed that the irregularly availed Cenvat Credit was reversed by the appellants immediately upon being pointed out by the audit that too with interest and therefore no show cause notice was issued for that purpose. The said credit was not utilized by the appellant for payment of excise duty etc. It is merely a book entry and therefore the credit wrongly availed does not amount to short payment of duty - The credit having been taken inadvertently stands reversed by the Appellant even before utilisation, no interest liability would arise inasmuch as there is no loss to the Revenue and the credit remained as a paper entry in their books of accounts. Since there was no loss of revenue to the government exchequer, therefore the question of compensating the revenue by way of interest does not arise. In the facts of the present case, Revenue cannot impose liability to pay interest on the assessee invoking the provisions of Rule 14 of Cenvat Credit Rules, 2004 - Appeal allowed - decided in favor of appellant. - Excise Appeal No. 87828 of 2013 - A/86898/2019 - Dated:- 24-10-2019 - HON BLE MR. AJAY SHARMA, MEMBER (JUDICIAL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents submitted by both the sides. The learned counsel submitted that the Appellant immediately upon being pointed out by audit, reversed the entire excess Cenvat credit (which was availed by the appellants under bona fide belief) with interest, but later the appellants came to know that there was sufficient credit balance of capital goods credit in their books and therefore they filed a refund claim to the extent of excess interest paid. Learned counsel further submits that as per Rule 14 of Cenvat Credit Rules, 2004, interest on late payment of Cenvat Credit is payable only when the Cenvat credit was wrongly taken and utilized by the assessee, whereas in the instant matter the Cenvat credit was availed by the appellants under bona fide belief and the same was not utilized by the appellants since during that period there was sufficient credit balance available in its books of accounts. He further submits that the learned Commissioner erred in relying upon the decision of the Hon ble Supreme Court in the matter of Union of India vs. Ind-Swift Laboratories Ltd.; 2011(265) ELT 3 (SC) whereas the same has been distinguished by the Hon ble High Court of Karnataka in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts. The Hon ble Karnataka High in the case of CCE ST, LTU, Bangalore v. Bill Forge Pvt. Ltd.;2012 (279) E.L.T. 209 (Kar.) after considering the Hon ble Supreme Court s decision in the case of UOI v. Ind-Swift Laboratories Ltd. 2011 (265) E.L.T.3(S.C.) held that if the wrongly availed credit does not stand utilised by the assessee and is reversed before utilisation, no interest liability would arise against them. A coordinate Bench of the Tribunal on an identical issue, while taking note of the law laid down by the Hon ble Supreme Court in the matter of Ind-Swift Laboratories Lt. (supra) as well as the decision of the Hon ble Karnataka High Court in the matter of Bill Forge Pvt. Ltd. (supra), allowed the appeal filed by the assessee therein. The relevant paragraph of the said decision is as under:- xxx xxx xxx 5. I find from available records that the Cenvat credit taken irregularly has not been utilized for payment of Central Excise Duty on removal of the finished goods. Thus, there is no loss of Revenue, and as such, interest demand for late reversal of Cenvat credit is not proper. In this context, the Hon ble Karnataka High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter titled as CCE, Raipur vs. Sharda Energy Minerals Ltd.; 2017 (49) STR 193 (Tri.-Del) in which the appeal was filed by Revenue, while dismissing the Revenue appeal held as under:- xxx xxx xxx 8. Learned Advocate appearing for the respondent draws my attention to a latest decision of the Hon ble High Court of Karnataka in the case of Commissioner of Central Excise and S.T., Bangalore v. Bill Forge Pvt. Ltd. - 2012 (26) S.T.R. 204 (Kar.) = 2012 (279) E.L.T. 209 (Kar.). The Supreme Court decision in the case of Ind-Swift Laboratories Ltd. was considered and it was held, that the interest would be payable from the date Cenvat credit is taken or utilized wrongly. By following the said decision of the Hon ble Supreme Court, the Hon ble Karnataka High Court, in an identical set of facts held that the assessee had not taken or utilized the Credit but only availed wrong credit in their account books and on pointing out the mistake, immediately reversed the entry. As no benefit of wrong entry in account books was taken, interest is not payable. The said order of the Karnataka High Court stand subsequently followed by them in the case of Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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