Appeal partially allowed under Cenvat Credit Rules, 2004. Interest liability upheld, penalty dropped.

The Tribunal partly allowed the appeal, upholding the interest liability but dropping the penalty under the Cenvat Credit Rules, 2004. The appellant voluntarily reversed the credit before the show cause notice, leading to the rejection of penalty for lack of tax evasion intent. The Tribunal distinguished between High Court judgments, following the Bombay High Court's decision on interest liability. The decision was rendered on January 31, 2018.

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Issues:
Appeal against disallowed cenvat credit, interest, and penalty under Cenvat Credit Rules, 2004.

Analysis:
1. The appellant availed cenvat credit on structural materials used for civil construction and conveyor system. The Commissioner disallowed the credit, imposed interest, and penalty.

2. The appellant argued that they did not utilize the credit for tax payment, had sufficient balance, and reversed it voluntarily before the show cause notice. Cited precedents to support no liability for interest or penalty.

3. The Revenue contended that the appellant wrongly took credit and reversed it only after being pointed out. Rejected the appellant's arguments citing relevant case laws.

4. The Tribunal found the appellant reversed the credit voluntarily before the notice, making them liable for interest. Rejected the penalty due to lack of intent to evade taxes, following precedents.

5. The Tribunal distinguished the Karnataka High Court judgment and upheld the interest liability based on the Bombay High Court's decision. Dropped the penalty due to lack of intent to evade taxes.

6. The appeal was partly allowed, upholding the interest liability and dropping the penalty. The decision was pronounced on January 31, 2018.

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