TaxTMI 
TaxTMI 
2014 (2) TMI 551
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.... be held as incorrect and liable to be reversed; the credit of Rs.50,818/- towards Cenvat Credit and Rs.1,015/- towards education cess so availed on CTD bars should not be demanded in terms of Rule 14 of Cenvat Credit Rules, 2004 read with sub section (1) of Section 11A of the Central Excise Act, 1944; and penalty under sub rule (1) of Rule 15 of the Cenvat Credit Rules, 2004 should not be imposed and the interest under Rule 14 of the Rules read with Section 11AB of the Act should not be collected from them. 3. The respondent in the written statement stated that the CTD bars were used in the factory for foundation of machinery base as the heavy machineries required strong platform to withstand heavy load and to do the machining operation and therefore the capital goods installed in the factory premises cannot function in the absence of foundation and the respondent claimed credit in terms of Rule 2(a)(A)(iii) and the CTD bars qualify for credit as they were used for foundation laid for machinery and would come within the scope of the word "accessories"as per the rule. Further, it was stated that there was sufficient balance in their Cenvat credit account from January 2005 to Feb....
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....d and proposing to impose penalty and interest, the assessee submitted their explanation stating that the CTD bars were used as foundation for the heavy machinery, without which the machinery cannot function and therefore claimed it to be inputs. Therefore, the assessees were under the bonafide belief that the CTD bars would qualify for availment of credit. Further, it is not in dispute that the credit availed was not utilised. Even at the time when the credit was taken, the assessee had sufficient balance in the Cenvat credit during January and February, 2005 and what ever credit availed on CTD bars remained static. Therefore, it cannot be taken to be a case where with an intention to evade payment of duty the assessee availed the credit. Though Rule 14 contemplates that Cenvat Credit taken shall be recovered from the manufacturer along with interest the facts of the present case are slightly different as there was no allegation that there was intention on the part of the assessee to evade payment of duty by wrongly availing the credit. Therefore, the provisions of Section 11AC of the Act could not have been invoked by the revenue for the purpose of levy of penalty. To that extent....
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....amount due and payable. Therefore, it observed that the High Court in the said case erroneously held that the interest can be claimed from the date of wrongful availment of CENVAT Credit and it should only be payable from the date when CENVAT Credit is wrongly utilized. 9. The learned counsel appearing for the assesee sought to distinguish the decision of the Hon'ble Supreme Court in the case of IND-SWIFT LABORATORIES LTD. by stating that, that was a case where the CENVAT credit was taken and utilized and not a case where CENVAT credit has been reversed as that of the case of the assessee herein. It is his further submission that reversal of credit would amount to "no credit" being taken. In this regard, reliance has been placed on the decision of Allahabad High Court in the case of Hello Minerals Water (P) Ltd., vs. Union of India reported in 2004 (174) ELT 422 (All.), the decision of the Karnataka High Court in the case of Commissioner of C.Ex. & S.T., LTU. Bangalore vs. Bill Forge Pvt.Ltd reported in 2012 (279) ELT 209 (Kar.) and the decision of the Hon'ble Apex Court in the case of Chandrapur Magnet Wires (P) Ltd. vs. Collector of C.Excise, Nagpur reported in 1996 (81) ELT 3....
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....n 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 & 4 of the Credit Rules proceeded to hold that the 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 where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as "AND" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole, we find no reason to read the word "OR" in between the expressions 'taken' or 'utilized wrongly' or 'ha....
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....ed in Ind-Swift Industries, we reject this contention too. Consequently, we hold that in the context of the decision in Ind-Swift Industries, irrespective of the utilization of the credit and going by the provisions as it stood during the relevant time, we accept the plea of the revenue that interest on the wrong credit is called for, as per Rule 14 read with Section 11AB and the circumstances on the aspect of leviable interest, we set aside the order of the Tribunal and allow the appeal. 17. The learned counsel for the assessee further pleaded that considering the smallness of the amount involved, as per the circular No.390/Misc./163/2010-JC dated 20th October 2010 , the appeal may be dismissed. We do not agree with the said submission. In the unreported decision in the case of Commissioner of Central Excise, Puducherry Commissionarate vs. CESTAT and anr., C.M.A.NOs.1308 of 2009 etc. batch dated 31.10.2013, a similar circular fixing monetary limit for filing appeals, in Circular dated 17.08.2011, was considered and it was held as follows:- "38. As regards the circular dated 17.8.2011, wherein the Central Board of Excise and Customs prescribed monetary limit for filing of app....