Cenvat Credit Register

[Sundresh Kumar]

Dear Team

We are importing material and paying cvd on import and also availing cenvat credit on cvd, we just had completed our excise audit in our factory for fy 13-14, while checking the cenvat credit register officer come to know that we have not debited the excise duty for Sep 13 in our cenvat credit register hence officer asked us to deposit the interest on said duty as it is not paid/adjusted in cenvat credit register.

We had enough credit balance lying in our cenvat credit register and after adjusting the Sep 13 excise duty we still had credit balance.

Though the excise return submitted by us for Sep 2013 had correct balance (we had debited the Sep 13 excise duty while submit the return) but still the officer has a view that we need to deposit the interest since we didnt adjust it in our cenvat credit register.

Kindly let me know if anyone face such issue and whether the officer is right, please let me know any case law related to this issue.

thanks & regards

[Mahir S]

Yes, you are liable to pay interest thereon as your case is covered under section 11A of Central Excise Act, 1944.

Benefit of rule 14 of the Cenvat Credit Rules, 2004 ( reg. Noti. No. 18/2012 CE (N.T.) dated 17.03.2012 reg. non payment of interet if cenvat credit wrongly availed but not utilised shall not be available herein, as your case pertains to payment/reversal of monthly excise duty at a stipulated date.  

Dont forget that the mistake was noted only during Audit and if not found, then you would have never reversed it in your cenvat account register.

AI Summary

Interest liability under central excise law: failing to adjust monthly excise in the cenvat register triggers interest despite return entries. Failure to debit a monthly excise duty in the cenvat credit register, even where the excise return shows the correct debit, attracts interest under the central excise interest provisions because non-adjustment or non-payment of monthly excise duty by the stipulated date is not covered by the exemption applicable to wrongly availed but unused cenvat credit; audit discovery of the omission does not eliminate interest liability.