Tribunal Rectifies Order: No Interest or Penalty on Time-Barred Cenvat Credit Demand.

The Tribunal allowed the ROM application, rectifying the order dated 08.02.2024. It held that the appellant was not liable to pay interest on the Cenvat credit amount due to the time-barred nature of the demand. Consequently, the demand for interest was set aside, and the penalty was annulled. The decision was pronounced on 10.12.2024.

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Issues:
Rectification of mistake application regarding payment of interest on Cenvat credit.

Analysis:
The appellant submitted a rectification of mistake (ROM) application seeking to set aside the penalty and interest imposed in an earlier order dated 08.02.2024. The appellant argued that the Tribunal had acknowledged their bona fide intentions and found no suppression of facts, leading to the setting aside of the penalty. However, the appellant contended that since the entire demand was time-barred, interest should not be chargeable. The appellant relied on a Supreme Court judgment to support their argument that the issue of time bar could be considered in a rectification application. On the other hand, the Revenue supported the original order, emphasizing that the Tribunal had consciously ordered the payment of interest, indicating no error on record.

Upon careful consideration of the submissions, the Tribunal examined the earlier order's findings in para 4. The Tribunal noted that despite the prima facie time bar on the demand, the appellant had paid a proportionate credit and was only contesting the penalty. The Tribunal observed that there was no suppression of facts as the department was aware of the relevant information. Consequently, the Tribunal upheld the demand to the extent of the credit paid by the appellant but set aside the penalty. The Tribunal also mentioned that since the entire case was time-barred, no consequential interest should be payable. The Tribunal agreed with the appellant's argument that demanding interest on the Cenvat credit payment was an error apparent on record, warranting rectification.

As a result of the analysis, the Tribunal held that the appellant was not liable to pay interest on the Cenvat credit amount. Therefore, the demand for interest was set aside, and the order dated 08.02.2024 was rectified accordingly. The ROM application was allowed, and the decision was pronounced in open court on 10.12.2024.

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