TaxTMI 
TaxTMI 
2014 (8) TMI 896
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.... credit instead of taking only 50%. This was found out subsequently and in the impugned order only interest has been demanded for the 50% of the credit taken wrongly and the amount is Rs. 26,03,299/-. The second issue is availment of Cenvat credit on SIM Cards by the appellant. On this issue Cenvat credit of Rs. 1,01,522/- during the period from April 2006 to September 2006 and Rs. 2,23,646/- during the period from October 2006 to September 2007 has been demanded with interest. 3. As regards the second issue namely availment of Cenvat credit of Central Excise duty paid on SIM Cards, the learned counsel submits that the credit has been denied on the ground that SIM Cards are capital goods classifiable under Chapter CETH 85 and therefor....
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....the case of CCE, Chandigarh v. Groz Beckert Asia Pvt. Ltd. [2009 (240) E.L.T. 222 (Tri.-Del.)] to submit that in the absence of determination of duty demand no interest under Section 11AB can be demanded. Learned AR would rely upon the decision of the Hon'ble Supreme Court in the case of Union of India v. Ind-Swift Laboratories Ltd. [2012 (25) S.T.R. 184 (S.C.) = 2011 (265) E.L.T. 3 (S.C.)] to submit that interest is payable and has been rightly demanded. As regards SIM Cards, he would submit that these are capital goods and excluded from the definition of 'capital goods' and therefore credit is not admissible. 5. I have considered the submissions made by both the sides. 5.1 As regards SIM Cards, I find that the appellants purch....
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.... of Section 11AB of the Act and Rules 3 & 4 of the Credit Rules proceeded to hold that interest cannot be claimed from the date of wrong availment of Cenvat credit and 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 manufac....
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....sly refunded. In view of the aforesaid judgment of the Apex Court, the question of reading the word 'and' in place of 'or' would not arise. It is also to be noticed that in the aforesaid Rule, the word 'avail' is not used. The words used are 'taken' or 'utilized wrongly'. Further the said provision makes it clear that the interest shall be recovered in terms of Section 11A and 11B of the Act." Para 19 only reproduced the relevant Rule and the Hon'ble High Court has agreed that in view of the judgment of the Hon'ble Supreme Court in the case of Ind-Swift Laboratories Ltd. question of reading 'OR' as 'AND' does not arise. I am unable to appreciate how this paragraph helps the appellant. In any case in the case of Bill Forge, Hon'ble High Cou....
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.... Section 73 and 75 of the Finance Act, 1994 read as follows : "73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. - (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, [Central Excise Officer] may, within one year from the relevant date, serve notice on the person chargeable with the Service Tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice". "75. Interest on delayed payment of Service Tax. - Every person responsible for collecting Service Tax ....