TMI Blog2023 (11) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no need to give any finding on this demand. Whether interest is demandable on irregular CENVAT Credit availed but not utilized? - HELD THAT:- The facts indicate that the appellant has reversed the irregularly availed CENVAT Credit. He has also reversed the interest amount on such irregularly or wrongly taken CENVAT Credit. The lower adjudicating authority has strictly and literally interpreted Rule 14 of the CENVAT Credit Rules, 2004. The words used in that Rule are taken or utilized wrongly . The Rule provides for recovery of irregularly or wrongly taken credit along with interest. However, regarding demand of interest for merely taking CENVAT Credit but not utilizing the same was considered and decided in favour of the appellant in many case laws. Reliance can be placed in COMMISSIONER OF CENTRAL EXCISE SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [ 2011 (4) TMI 969 - KARNATAKA HIGH COURT ] where it was held that The liability to pay interest would arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise - In the case of J.K. TYRE INDUSTRIES LTD. VE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Motor Vehicle Parts and are availing CENVAT Credit of the duty paid on inputs, input services and capital goods for payment of duty on their final products. This appeal is filed assailing the Order-in-Original No. LTUC/441/2013-C dated 26.11.2013 passed by the Commissioner of Central Excise and Service Tax, LTU, Chennai, wherein demand of Rs.1,87,69,233/- was confirmed being ineligible credit availed by the appellant under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A(4) / 11A(1) of the Central Excise Act, 1944. Recovery of appropriate interest on the above demand was also ordered and a penalty of Rs.1,87,69,233/- was imposed on the appellant under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 2.1 Brief facts of the appeal are as given below:- 2.2 During the Audit of the accounts of the appellant, it was seen that the appellant have availed following wrong / double credits in their CENVAT Accounts: - i. CENVAT credit of duty paid on inputs, was availed twice on one and the same input documents (Annexure A of SCN). The excess CENVAT Credit taken thus is to the tune of Rs.89,75,790/- on 382 input docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied upon the Hon ble Supreme Court s decision in the case of Union of India Vs. Ind-Swift Laboratories Ltd. [2011 (265) ELT 3 (SC)] wherein it was held that the interest is payable on wrong availment / mere taking of ineligible credit. On the question of whether interest on irregular credit whether arises from the date of availaing such credit or date of utilisation, it was held that as Rule 14 of CENVAT Credit Rules, 2004 specifically providing for interest when CENVAT Credit taken or utilised wrongly or erroneously refunded interest on irregular credit arises from the date of taking such credit. 3.1 The Ld. Advocate Shri K. Senguttuvan representing the appellant has submitted that interest is only payable when the wrong availment has caused benefit to the appellant or loss of revenue to the Government. Availment of credit twice on the documents was completely unintentional and due to negligence of their employee and the Government did not loose any revenue as they were having enough credit balance in their CENVAT accounts. He has argued that the adjudicating authority s reliance on the Apex Court s decision in the case of Union of India Vs. Ind-Swift Laboratories Ltd. [2011 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2 He has submitted that the words used by the legislature in the above provision are taken or utilized wrongly . Plain and straight interpretation of the above provision makes it clear that interest becomes payable when CENVAT Credit has been taken wrongly or the credit so taken has been utilized . The appellant s argument that interest liability does not arise just by availing ineligible credit, but, arises only when credit so availed is utilized is an attempt to substitute the word or in the above definition by And . It is a well settled legal principle that any statute should be interpreted as it is even if the intention is imperfect, imprecise or there is an obvious omission. He has referred to the decision rendered by the Hon ble Supreme Court s decision in the case of Union of India Vs. Ind-Swift Laboratories Ltd. (supra). The Hon ble Supreme Court has held that while interpreting Rule 14 of the CENVAT Credit Rules, 2004, the attempt of the High Court to read down the provision by way of substituting the word or by an And , so as to give relief to the assessee is found to be erroneous and once the CENVAT Credit is taken, as the beneficiary is at liberty to uti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Commissioner of GST and Central Excise, Bolpur [E/78557 of 2018 dated 20.09.2019] 7.1.3 The relevant portion of the judgment of the Hon ble High Court in the case of Bill Forge Pvt. Ltd. (supra) is extracted below:- 19 . Rule 14 of the CENVAT Credit Rules, 2004 reads as under : Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded. - Where 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The assessee accepted the mistake and immediately reversed the entry. Thus the assessee did not take the benefit of the wrong entry in the account books. As he had taken credit in a sum of Rs. 11,691-00, a sum of Rs. 154-00 was the interest payable from the date 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 put 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Tyre and Industries Ltd. Vs. Assistant Commissioner of Central Excise, Mysore [2016 (340) ELT 193 (Tri. LB)], Tribunal Large Bench has come to the conclusion that interest liability would not arise when the assessee had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty. 7.1.6 The same view was taken by the Tribunal in the following cases:- i. Commissioner of Central Excise Vs. Sharda Energy Minerals Ltd. [2013 (291) ELT 404 (Tri.-Del.)] ii. Gary Pharmaceuticals (P) Ltd. Vs. Commissioner of Central Excise, [2013 (297) ELT 391 (Tri.-Del.)] iii. Commissioner of Central Excise Vs. Balrampur Chini Mills Ltd., [2013-TIOL-1142- CESTAT-Del] iv. M/s. Gurmehar Construction Vs. Commissioner of Central Excise [2014-TIOL-1205- CESTAT-Del] 7.1.7 Appreciating the ratio of above decisions, we find that the recovery of interest is not legally justified and not maintainable. Whether the extended period is invokable and imposition of penalty sustainable? 7.2.1 It is on record that the appellant has reversed the entire CENVAT Credit wrongly taken or irregularly availed on being pointed out as a result of the Audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as has been impressed upon by the department but each non disclosure cannot be called as the suppression, that too with malafide intent to evade payment of duty. It is only in this case that extended period of limitation can be invoked and the penalty can be imposed. Hon ble Apex Court in the case of Continental Foundation Jt. Venture vs. CCE reported in [2007 (216) ELT 177(SC)] has held that something positive other than mere inaction or non-payment of duty is required for invoking extended period under proviso to section 11 A (1) of Central Excise Act and that suppression means failure to disclose full information with intent to evade the payment of duty and mere omission to give certain information is not suppression of fact unless it is deliberate with intention to evade the payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. Above all, suppression of facts is clearly qualified by word wilful in the section. Hence, presence of mensrea to evade duty has to be there. From the facts as discussed above since there has been prompt reversal by the appellant that too of a such amount which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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