TMI Blog2024 (5) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... s higher judicial fora that when CENVAT Credit was merely taken in the books but not utilized would not involve any payment of interest or penalty. The issue of unutilized CENVAT Credit was a subject matter before the Hon ble Supreme Court in the case of UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. [ 2011 (2) TMI 6 - SUPREME COURT] and the decision was considered by the Hon ble High Courts and co--ordinate Benches of the Tribunal 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 'it is only when the assessee had taken the credit, in other words by taking such credit, if he had not paid the duty which is legally due to the Government, the Government would have sustained loss to that extent. Then the liability to pay interest from the date the amount became due arises under Section 11AB, in order to compensate the Government which was deprived of the duty on the date it became due. Without the liability to pay duty, the liability to pay interest would not arise. The liability to pay interest would arise only when the duty is not paid on the due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ORDER Service Tax Appeal No. ST/42325/2014 has been filed by M/s. Bharat Sanchar Nigam Limited, aggrieved by the Order in Original No. 15/2014 dated 05.08.2014 passed by Commissioner of Central Excise Service Tax, Coimbatore disallowing CENVAT Credit and ordering for recovery of wrongly availed CENVAT Credit amounting to Rs.97,69,082/--, Rs.2,23,468/-- and Rs.48,10,307/-- respectively under Rule 14 of CENVAT Credit Rules, 2004 read with extended proviso to Section 73 of Finance Act, 1994 ( ACT ) besides levy of applicable interest under Section 75 of Finance Act,1994 and imposition of penalty of Rs.1,48,02,857/-- under Rule 15(3) of Rules ibid read with Section 78 of Act ibid. 2. The brief facts of the case are as detailed below:-- 2.1 The ST--3 returns of the Appellant for the period November 2009--September 2010 were verified by the department and it appeared that the entire CENVAT credit of capital goods to the tune of Rs.1,95,38,163 was availed instead of 50%-- Rs.97,96,082/-- as stipulated under Rule 4(2)(a) of CCR,2004 which is reproduced below:-- (2) (a) The CENVAT credit in respect of capital goods received in a factory or in the premises of the provider of output service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, besides appropriating an amount of Rs.2,23,468/-- already paid by the Appellant and imposing a penalty of Rs.1,48,02,857/-- under Rule 15(3) of Rules ibid read with Section 78 of Act ibid. 3. Aggrieved, present appeal by the Appellant before this forum. 4. As evident from the grounds of appeal, the submissions of the appellant are as follows:-- (i) Regarding CENVAT credit of Rs.97,96,082/-- it was contended that although 100% credit was taken, only 50% was utilized during the year and the balance credit was not utilized till the date of its eligibility. (ii) Regarding CENVAT credit availed on Customs Cess, it was pointed out that the same was reversed before utilization and hence interest was not liable to be paid relying on the decision of the Hon ble High Court of Madras in the case of Commissioner of Central Excise Vs. Strategic Engg. Pvt. Ltd. [2014--TIOL--466 HC--Mad--CX], which has held that interest cannot be demanded if CENVAT Credit taken only but not actually utilized. It reads as follows:-- 10. In fact, this Court has perused the entire decision reported in 2012 (26) S.T.R. 204 (Karnataka) (Commissioner of Central Excise S.T., Bangalore v. Bill Forge Private Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l infirmity for which substantial benefits could not be denied. Though invoices were addressed to other divisions of the Appellant, the equipments were installed in their jurisdiction and hence the Appellants were entitled for the credit as other divisions were only planning divisions. (iv) Regarding invocation of extended period it was submitted being a public sector undertaking, the allegation of deliberate suppression of facts with an intent to evade is not sustainable. It was pointed out that major portion of the credit was not utilized before the eligible dates and there were no undue benefits to the Appellants. It was further submitted that all the details were duly furnished in their ST--3 returns and the relevant invoices and bills of entries based on which credit was taken were also made available to the department and hence under the circumstances, it was averred the allegation of deliberate suppression with an intent to evade on a Public Sector Undertaking owned by the Government of India was not sustainable. It was also averred that the SCN was issued on 30.09.2013 well beyond the actual cut--off date for issue of SCN i.e 25.04.2011 / 25.10.2011, as the case may be and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CCR, 2004. 6.4 It was pointed out that the appellants had not acted as per the provisions of the CCR, 2004 with respect to the wrong availment of CENVAT credit and in declaring the wrong details in the ST 3 returns which was a deliberate suppression of facts and contravention of the provisions of Finance Act, 1994 and the rules made thereunder with an intent to evade payment of Service Tax and therefore extended proviso to Section 73 of Finance Act, 1994 has been rightly invoked. Hence Appellants were liable to pay interest and penalty. 6.5 He has placed reliance on the ratio of the judgment of the Hon ble Supreme Court in the case of M/s. Ind Swift Laboratories Ltd. [2011 (265) ELT 3--Supreme Court] wherein it was held that:-- 15 . In order to appreciate the findings recorded by the High Court by way of reading down the provision of Rule 14, we deem it appropriate to extract the said Rule at this stage which is as follows:-- 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 manufacturer or the provider o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is required to be given to the aforesaid expression/provision which is clear and unambiguous as it exists all by itself. So far as Section 11AB is concerned, the same becomes relevant and applicable for the purpose of making recovery of the amount due and payable. Therefore, the High Court erroneously held that interest cannot be claimed from the date of wrong availment of CENVAT credit and that it should only be payable from the date when CENVAT credit is wrongly utilized. Besides, the rule of reading down is in itself a rule of harmonious construction in a different name. It is generally utilized to straighten the crudities or ironing out the creases to make a statute workable. This Court has repeatedly laid down that in the garb of reading down a provision it is not open to read words and expressions not found in the provision/statute and thus venture into a kind of judicial legislation. It is also held by this Court that the Rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. ------------ 20 . Therefore, the attempt of the High Court to read down the provision b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t actually utilizing the same was considered and decided in favor of the appellant in many case laws. 11.1 The issue of unutilized CENVAT Credit was a subject matter before the Hon ble Supreme Court in the case of Ind--Swift Laboratories Ltd. (supra) and the decision was considered by the Hon ble High Courts and co--ordinate Benches of the Tribunal in the following decisions among others:-- i. Commissioner of Central Excise and Service Tax, LTU, Bangalore Vs. Bill Forge Pvt. Ltd. [2012 (279) ELT 209 (Kar.)] ii. M/s. SAIL Vs. Commissioner of GST and Central Excise, Bolpur [E/78557 of 2018 dated 20.09.2019] 11.2 The relevant portion of the judgment of the Hon ble High Court of Karnataka in the case of Bill Forge Pvt. Ltd. (supra) is extracted below:-- 7 . In the light of the aforesaid material on record and rival contentions, the substantial question of law that arises for consideration in this appeal is as under : The words Cenvat Credit has been taken , does it mean making an entry in the account books showing the entitlement of the said credit? or does it mean the said credit found in the account books actually taken while clearing the finished products.? .. .. 19 . Rule 14 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 22 . In the instant case, the facts are not in dispute. The assessee had availed wrongly the Cenvat credit on capital goods. Before the credit was taken or utilized, the mistake was brought to its notice. 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, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein it has been clearly stated as taken and utilised . Therefore, it is quite clear that mere taking itself would not compel the assessee to pay interest as well as penalty. Further, as pointed out earlier, the subsequent amendment has given befitting answer to all doubts existed earlier. Since, the subsequent amendment has cleared all doubts existed earlier in respect of Rule 14 of the said Rules, it is needless to say that the argument advanced by the learned counsel appearing for the appellant/Department is erroneous, whereas the argument advanced on the side of the respondent is really having merit and the substantial questions of law settled in the present Civil Miscellaneous Appeal are not having substance and altogether the present Civil Miscellaneous Appeal deserves to be dismissed. 11.4 In the case of J.K. 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. 11.5 The same view was taken by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges incurred by Karnataka Circle towards installation commissioning of the Broad Band equipment on behalf of Coimbatore SSA had been distributed to Coimbatore SSA through an Advice of Transfer Debit; CTSD, Bangalore, Karnataka Circle was a registered Input Service Distributor since March 2006; hence, there was no contravention of Rule 9 of CENVAT Credit Rules, 2004. 13. We find that the appellant is a Government owned company and it has got different circles, operational areas and divisions, as such discrediting these documents for the purpose of availment of CENVAT Credit is not legal and proper. Unless there is an allegation that the capital goods are diverted or not installed in the appellant s premises, it has to be held that the appellant is eligible for the CENVAT Credit availed. 14. On the issue of invoking the extended period, the Ld. Advocate Shri S. Durairaj has argued that major portion of the CENVAT Credit taken in their books was not utilized before the eligible dates and the appellant has not got any benefit of taking such credit into their books. He has further submitted that all the details were duly furnished to the Department in their ST--3 Returns and the relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, the order of penalty has been set aside by the Tribunal. Having heard learned counsel, we find that no exception is provided to interfere in the impugned order in which pure findings of fact have been recorded. Once the dealer-respondent is a Government organisation like Markfed it is not easy to infer any evasion of duty much less its intention to do so. There is thus no merit in the appeal as no question of law warranting its admission would arise. Dismissed . 16. Further, in the case of Commissioner of Central Excise, Indore Vs. Nepa Ltd. [2013 (298) ELT 225 (Tri.--Del.)] it has been held as follows:-- 8 . In any case it is seen that the show cause notice has been issued after expiry of normal limitation period of one year from the relevant date and same would not survive unless the Department proves that the respondents had deliberately suppressed the relevant facts from the Department with intent to evade the duty. In this regard we find that the respondent is a Public Sector Undertaking wholly owned by the Government of India and in our view it would be absurd to accuse a wholly Government owned company of non-payment of excise duty with intent to evade the tax. In the ci ..... 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