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of <h1>Tribunal Upholds Decision on Cenvat Credit Reversal</h1> <h3>Commissioner of Central Excise Versus M.R.F. Ltd.</h3> The Tribunal upheld the Commissioner (Appeals) decision to set aside the interest and penalty imposed on the respondents for the reversal of cenvat credit ... Levy of interest on Reversal of cenvat credit - Held that:- Adjudicating authority has demanded credit interest of ₹ 50,827/- and imposed penalty of ₹ 10,000/- which was set aside by the Commissioner (Appeals) in the impugned order. On perusal of the order, I find that the LAA by relying on the Tribunal s decisions against TATA Motors Ltd. Vs CCE Jamshedpur [2004 (8) TMI 276 - CESTAT, KOLKATA] and Gokulam Spinners Vs CCE [2004 (9) TMI 648 - CESTAT CHENNAI] and other decisions had allowed the appeal and set aside the interest and penalty. In this regard, I find that the Tribunal s Principal Bench at Delhi on identical issue in the case of Gurhmehar Construction Vs CCE Raipur (2014 (7) TMI 849 - CESTAT NEW DELHI) had allowed the appeal by relying Hon ble High Court s decision in the case of Commissioner Vs Bill Forge Pvt. Ltd. - [2011 (4) TMI 969 - KARNATAKA HIGH COURT] and also distinguished the Supreme Court in the case of UOI Vs Indo-Swift laboratories Ltd. - [2011 (2) TMI 6 - Supreme Court]. - ratio of the Tribunal’s decision and the Hon ble High Court decisions are squarely applicable to the present case. Therefore, I hold that respondents are not liable for interest on the credit already reversed. Accordingly, the impugned order is upheld - Decided against Revenue. Issues:Reversal of cenvat credit and demand of interest.Analysis:The appeal was filed by the Revenue against the Commissioner (Appeals) order regarding the reversal of cenvat credit and the consequent demand for interest. The respondents had availed cenvat credit under the DEPB scheme but became ineligible due to an amendment in the Export Policy. The appellants had already reversed a significant amount of credit but faced a demand for interest and penalty by the adjudicating authority. The Commissioner (Appeals) set aside the interest and penalty, leading to the Revenue's appeal seeking to restore the original order.The arguments presented by both sides focused on the utilization and reversal of the cenvat credit, citing relevant case laws to support their positions. The Revenue contended that interest was rightly demanded as the appellants had utilized the credit before reversal, while the respondent's advocate emphasized that the credit remained unutilized before reversal, justifying the Commissioner (Appeals) decision to set aside the interest and penalty.Upon thorough consideration, the Tribunal found that the core issue revolved around the demand for interest on the already reversed credit. The Tribunal examined various precedents, including the Tribunal's Principal Bench decision in a similar case, to determine the applicability of interest in such situations. By referencing the judgments of the Hon'ble Karnataka High Court and other relevant decisions, the Tribunal concluded that the respondents were not liable for interest on the credit already reversed. Therefore, the impugned order was upheld, and the Revenue's appeal was rejected, while the cross objection filed by the respondent was disposed of accordingly. The decision was pronounced in open court on 24.4.2015.
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