TaxTMI 
TaxTMI 
2010 (12) TMI 420
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....al)] made by the Customs, Excise & Service Tax Appellate Tribunal (the Tribunal), proposing the following three questions : "[1] Whether or not the CESTAT is right in holding that M/s. Sweet Industries, Daman is not required to pay any interest on Cenvat Credit availed on input/raw material destroyed in the fire accident & on Cenvat Credit availed on input/raw material contained in the semi-finished goods destroyed in the fire accident? [2] Whether the Tribunal committed error in interpreting the provisions of Section 11AB of the Central Excise Act and by further holding that Section 11AB of the Act does not apply in case of delay in reversal of wrongly availed Cenvat Credit? [3] Whether the Tribunal committed error ....
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....d goods, Cenvat Credit availed on raw material destroyed in the fire accident and semi-finished goods destroyed in the fire accident, and confirmed the demand of interest of Rs. 58,435/-. 5. The assessee carried the matter in appeal before the Commissioner (Appeals) who vide the order dated 28-9-2006, dismissed the appeal. The Commissioner (Appeals) found that there was delay in payment of duty on the part of the assessee. Accordingly, interest at appropriate rate under Section 11AB of the Act was recoverable from it. Being aggrieved, the assessee took the matter in second appeal before the Tribunal and succeeded. 6. Ms. Naynaben Gadhvi, learned Standing Counsel for the appellant-revenue submitted that though the assessee had rev....
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.... 8. As can be seen from the impugned order of the Tribunal, before the Tribunal, on behalf of the assessee, interest liability on finished goods had been admitted. Insofar as the interest on the Cenvat Credit of Rs. 1,25,844/- reversed by the assessee on inputs contained in semi-finished goods destroyed in fire, it was submitted that in the light of the decision of the Larger Bench of the Tribunal in the case of Grasim Industries v. Commissioner of Central Excise & Customs, Indore, [2007 (208) E.L.T. 336 (Tribunal - LB)] the assessee was not even required to reverse the credit taken on inputs contained in semi-finished goods destroyed in the fire since the requirement of Cenvat Credit Rules that the inputs should have been used in m....
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....een utilized, the demand for interest on this amount also has to be set aside. I am not going into the merits of other contentions since the benefit of non-levy of interest on this ground alone is sufficient." 9. Thus, insofar as the demand confirmed by the adjudicating authority on the interest on delayed payment of duty on finished goods is concerned, the assessee had accepted the liability. As regards the interest of Cenvat Credit reversed by the assessee on inputs which had been used for manufacture and were contained in semi-finished goods, in the light of the decision of the Larger Bench of the Tribunal in the case of Grasim Industries (supra), the assessee was not even required to reverse the credit taken on the inputs contai....
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....sions of Sections 11A and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries. 12. In the facts of the present case, the assessee had availed of Cenvat Credit to the extent of 50% of the Cenvat Credit in respect of the capital goods availed by it after the fire accident. Since, the assessee was not entitled to avail Cenvat Credit after the accident, it was held that the assessee was liable to pay interest of Rs. 58,435/- under Rule 12 of the Rules read with Section 11B of the Act for taking undue and illegal financial benefit in the form of wrong availment and wrong utilization of the credit. In this regard, before the Tribunal, on behalf of the assessee, it had been pointed out that though Cenvat Credit of Rs....