2013 (6) TMI 366
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....d in violation of the provisions of Rule 4(7) of the CENVAT Credit Rules, 2004. On being pointed out by the audit team, the assessee reversed the excess credit taken. (b) The assessee discharged service tax liability through CENVAT credit account not on the due dates but on dates later than the due dates and also in many cases the assessee has short-paid the service tax liability. However, on such delayed payment the assessee did not discharge the interest liability as required under Section 75 of the Finance Act, 1994, which was quantified at Rs. 1,78,02,813/- for the period March 04 to March 08. It was further found that as on 31-3-2008, the assessee had short-paid service tax amounting to Rs. 1,00,54,774/- which on being pointed out, the assessee made good. However, they did not discharge the interest liability on such short-payment amounting to Rs. 27,43, 686/-. (c) The assessee removed capital goods on which credit had been availed without following the prescribed procedure and without reversing the credit, thereby availing wrong credit amounting to Rs. 53,85,476/- which they paid later. However, they did not discharge the interest liability amounting to Rs. 5,16,731/- on su....
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....learned Additional Commissioner (AR) appearing for the Revenue on the other hand strongly opposes the contentions and relies on the judgment of the Hon'ble Apex Court in the case of Ind-Swift Laboratories reported in 2011 (265) E.L.T. 3 = 2012 (25) S.T.R. 184 wherein it was held that liability to pay interest arises when credit is wrongly taken and it is not necessary that to attract interest liability, the credit should have been utilised. He further submits that the extended period of time has been rightly invoked as the appellant suppressed the facts by furnishing wrong returns and the short payment of service tax and wrong availment of credit could be detected only on audit of the books of accounts of the appellant. Therefore, he pleads that the appellant be put to terms. 5. We have carefully considered the submissions made by both the sides. 5.1 As regards the reliance placed by the counsel for the appellant on the Bill Forge Pvt. Ltd. case cited supra, the facts are distinguishable. In that case the credit wrongly taken was reversed before the liability to pay duty arose and, therefore, it was held that without the liability to pay duty, the liability to pay interest would ....
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....ly or has been erroneously refunded and that in the case of the aforesaid nature the provision of section 11AB would apply for effecting such recovery. 17. We have very carefully read the impugned judgment and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the Cenvat credit has been utilized wrongly for according to the High Court interest can not be claimed simply for the reason that the Cenvat credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High Court on a conjoint reading of section 11AB of the Act and Rules 3 and 4 of the Credit Rules proceeded to hold that interest would be payable from the date Cenvat credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that ....
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....n 2009 (239) E.L.T. 385. Thus in respect of demand of interest, in cases where there was delay in payment of service tax by the appellant, amounting to Rs. 2.10 crore approximately, the provisions of Section 75 of the Finance Act, 1994 are clearly attracted and there is no prima facie case in favour of the appellant. 5.4 As regards the invoking of extended period of time, it is a question of fact as well as law. On a perusal of the records placed before us, it prima facie appears that there were substantial differences between the figures reflected in the books of accounts maintained by the appellant and those declared in the service tax returns filed by the appellant with the department. These discrepancies could be unearthed only by audit of the records of the company. No efforts were made by the company to verify their records to ensure statutory compliance. No credible explanation has been offered by the appellant except for stating that these errors are clerical in nature and have been committed through oversight. In a tax regime, which places heavy reliance on voluntary compliance on the part of the assessee, it is incumbent upon the assessee to determine and discharge the t....