2015 (11) TMI 1353

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....14 of CENVAT Credit Rules was amended w.e.f. 1.4.2012 clarifying that the liability of interest and penalty will be applicable only when the CENVAT credit taken is utilized. He says that in their case they had only taken the CENVAT credit erroneously but had sufficient balance in their account of CENVAT credit and had utilized only small portion of the same for which they have already deposited interest; therefore for the unutilized portion they should not be punished by levy of interest and equivalent penalty. 3.1 The learned advocate citing the Honble Madras High Court's decision in the case of CCE, Madurai vs. Strategic Engineering (P) Ltd.: 2014 (310) E.L.T. 509 (Mad.) says that Honble Madras High Court clarified that as the Rule 14 ....

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....rer or the provider of the output services. 4.1 The learned AR argues that the matter concerns with the period prior to the amendment made in Rule 14 of CENVAT Credit Rules i.e., before 1.4.2012, therefore interest and penalties are leviable in this case. Learned AR is also citing in support the decision of the Hon'ble Bombay High Court in the case of CCE, Pune-I vs. GL & V India Pvt. Ltd. decided on 27.4.2015 and reported in 2015 (321) E.L.T. 611 (Bom.) and says that this decision quoted and followed the Hon'ble Supreme Court decision made in the case of Ind-Swift (supra). He further argues that the decision of Hon'ble Madras High Court in the case of CCE vs. Strategic Engg. (supra) was also quoted and considered by Hon'ble Bombay High Co....

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....ing 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 manu....

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....urt that the Rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute" 5.1 Hon'ble Bombay High Court in the case of CCE, Pune-I vs. GL & V India Pvt. Ltd. (supra) has also considered this issue in detail and held that the word 'OR' cannot be substituted with the word 'AND' though after clarification of the matter, the Hon'ble High Court of Bombay remanded the subject matter back to the Tribunal for consideration on merits. The Hon'ble High Court of Bombay in this case inter alia stated as below: "16. In so far as the judgment passed by the Madras High Court is concerned, the Madras High Court has taken a view that mere taking of Ce....