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2020 (2) TMI 186

..... cise Act, 1944 - period of dispute from October 2012 to March 2013. Whether the Appellant has already reversed the amount of ₹ 11,06,691/- as Cenvat credit or not by making an entry in the books of accounts on 30/06/2017 and thereby reducing the amount of Cenvat credit to be transferred in TRAN 1 form in GST? - HELD THAT:- The Appellant has done the said reversal in the books of accounts and has thereby not carried the said Cenvat credit into GST regime. Further, the GST regime has been introduced w.e.f. 01/07/2017. Thus, there is no further reversal required in the matter. Hence the demand to the extent of ₹ 11,06,691/- as confirmed by the learned Commissioner (Appeals) deserves to be set aside. Demand of interest - HELD THAT:- The Appellant has asserted that it had sufficient credit balance in its account and also produced a Chartered Accountant certificate for the same. Based on the applicable provisions under Rule 14 of the CENVAT Credit Rules, as was in force during the period from April 2012 to March 2013, It is held that the Appellant is not required to pay any interest. Thus, since the appellant had sufficient credit balances, in any case, there would be no loss .....

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..... ved only after a lapse of three years and three months and in the meantime during the time of transition of Goods and Services Tax in India, the appellant company had taken a call not to take forward any disputed liability ahead and hence at the time of availment of credit in the GST regime, it had transferred the Cenvat Credit balance after deducting an amount of ₹ 11,06,691/- as on 30.06.2017. In support of his claim the appellants had already filed a Certificate from independent Chartered Accountant dated 17.08.2018 which is available on page 181 of appeal paperbook and marked as Annexure-A/5, which states as under:- We have gone through the Statement of Excise Return (Form ER-1) for the month of April 2017, May 2017 & June 1027 and GST Return from the period 31st July, 2017 to 31st March, 2018 along with Electronic Credit Ledger from the GST Portal and Input Ledger from the Unaudited Books of Accounts for the Financial Year 2017-18 and other relevant records as contained in the Statement of selected Financial Data for the period Mar, 2018 in respect to M/s.Anmol Stainless Private Limited having Registered Office at 229 AJC Bose Road, Cresent Tower, 6th Floor, Kolkata- .....

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..... #8377; 11,06,691/- stood reversed in the books of accounts of appellant assessee, but there was no appropriation. He also referred to the second ground taken by the appellant company regarding liability of interest under Rule 14. It is his submission that the dispute pertains to the period October 2012 to March 2013 and the reversal has been done only in the year 2017. Hence the appellant assessee is liable to pay interest for the intervening period. He further submits that the appellant has not brought on record any document to substantiate their claim that they were having sufficient credit balance all along. 5. In his counter the learned Chartered Accountant refers to page 186, 187 and 188 of the appeal paperbook being a ledger copy of Basic Excise Duty Register. 6. Heard both sides and perused the appeal records. 7. The short issue that arises for consideration in the instant appeal is with respect to whether the Appellant has already reversed the amount of ₹ 11,06,691/- as Cenvat credit or not by making an entry in the books of accounts on 30/06/2017 and thereby reducing the amount of Cenvat credit to be transferred in TRAN 1 form in GST. On perusal of the entire case re .....

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..... le. The levy of interest is on the actual amount which is withheld and the extent of delay in paying tax on the due date. If there is no liability to pay tax, there is no liability to pay interest. Section 11AB of the Act is attracted only on delayed payment of duty i.e., where only duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person liable to pay duty, shall in addition to the duty is liable to pay interest. Section do not stipulate interest is payable from the date of book entry, showing entitlement of Cenvat credit. Interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly. 9. The above decision in Bill Forge (Supra) has been further followed by the Karnataka High Court in the following cases: CCE, Bangalore vs. Pearl Insulation Ltd. 2012 (281) ELT 192 (Kar) CCE, Bangalore vs. Gokaldas Images (P) Ltd. 2012 (28) STR 214 (Kar) 10. Relying on the above decisions, the Hon ble Madras High Court in CCE vs. Strategic Engineering (P) Ltd 2014 (310) ELT 509 (Mad) has observed that :- 11. It is an admitted fact .....

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..... urt in CCE vs. Maruti Udyog Ltd (Supra). ..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 Excise, Delhi-III v. Maruti Udyog Limited, 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 above decision of the Punjab & .....

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