TaxTMI 
TaxTMI 
2014 (7) TMI 849
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....bsp; (i) Confirmed a demand of Rs. 78,17,056/- (including Education Cess) alongwith interest towards the value of diesel supplied from the service recipient (which was not included in the assessable value) under the provision of Section 73 read with Section 75 of Finance Act 1994. (ii) Disallowed Cenvat credit of Rs. 14,68,800/- (including Education Cess) taken in respect of dumpers under Rule 14 of Cenvat Credit Rules 2004. (iii) Confirmed demand of Rs. 2328/- towards Service Tax credit taken respect of telephone service as telephones were not registered in the name of the Appellants. (iv) Imposed penalty of Rs. 92,88,184/- under Section 78 ibid read with Rule 15....
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....n the Appellants' favour by the CESTAT Larger Bench in the case of Bhayana Builders referred to earlier. He however stated that interest on the Cenvat credit wrongly taken is chargeable from the date on which it was taken even if it was not utilized before reversal and referred to the Apex Court judgement in case of U.O.I. Vs. Indo Swift Laboratories 2011 (265) ELT 3 (SC). He further added that the Karnataka High Court judgement is distinguishable as has been done in the case of Balmer Lawrie & Co. Ltd. Vs. Commissioner of Central Excise 2014 (301) ELT 573 (Tri-Mum.) and that the said judgement has also been held per incurium by CESTAT in the case of M/s. Dr. Reddy's Laboratories Ltd. Vs. Commissioner of Central Excise, Hyderabad. ....
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.... is seen that the Hon'ble Karnataka High Court in the case of M/s. Bill Forge Pvt. Ltd. has discussed and considered the judgement of Hon'ble Supreme Court in the case of M/s. Indo-Swift Laboratories (supra) in quite some detail in Paras 16 to 20 and then goes on to enumerate the principle of charging interest in para 21 which is quoted below:- "21. Interest is compensatory in character, and is imposed on an assessee, who has withheld payment of any tax, as and when it is due and payable. The levy of interest is on the actual amount which is withheld and the extent of delay in paying tax on the due date. If there is no liability to pay tax there is no liability to pay interest. Section 11AB of the Act is attrac....
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....ment of the Hon'ble Supreme Court in case of M/s. Indo-Swift Laboratories in a manner or to the extent some other court would have chosen to do. Thus, we find that the said judgement of the Hon'ble Karnataka High Court cannot be held to be per incuriam even from a liberal stand point. 8. Coming to the judgement of the CESTAT, Mumbai in case of M/s. Balmer Lawrie (supra), it is seen that the distinction is sought to be made on the ground that the facts are different. The Hon'ble CESTAT is para 5.2 inter-alia states as under: "The reliance placed by the appellant on the decision of the Hon'ble Karnataka High Court in the case of Bill Forge Pvt. Ltd. (supra) and the other decisions will not apply to the....
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....indings (and basis of those findings) contained in the judgement sought to be distinguished. The differences in facts pointed out by the Hon'ble CESTAT Mumbai in case of M/s. Balmer Lawrie (supra) do not have any such implication. 9. The Hon'ble Karnataka High Court in the case of M/s. Bill Forge Pvt. Ltd. (supra) after taking due note of the judgement of Hon'ble Supreme Court in the case of Indo-Swift Laboratories Ltd. (supra) concluded in para 21 as under:- "21. Interest is compensatory in character, and is imposed on an assessee, who has withheld payment of any tax, as and when it is due and payable. The levy of interest is on the actual amount which is withheld and the extent of delay in paying tax o....