2015 (4) TMI 1029

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....ms Notification 45/2002 dt. 22.4.2002. However, consequent on the amendment in the Export Policy, the respondents are not eligible to avail cenvat credit. The appellants have already reversed the credit of Rs. 50,000/- and Rs. 17,58,244/-. However, the adjudicating authority issued SCN demanding interest on the irregular availment of cenvat credit and confirmed the interest of Rs. 50,827/- under Rule 12 read with Section 11AB and also imposed penalty of Rs. 10,000/-. On appeal, the Commissioner (Appeals) by relying on Tribunal's Larger Bench decision set aside interest and penalty. The said order was reviewed by the department and filed the present appeal seeking to restore the order of the adjudicating authority confirmed the demand of int....

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....emand of interest on the credit already reversed by the appellant. The adjudicating authority has demanded credit interest of Rs. 50,827/- and imposed penalty of Rs. 10,000/- which was set aside by the Commissioner (Appeals) in the impugned order. On perusal of the order, I find that the LAA by relying on the Tribunals decisions against TATA Motors Ltd. Vs CCE Jamshedpur  2005 (120) ECR 371 (Tri.-Kolkata) and Gokulam Spinners Vs CCE  2005 (98) ECC 457 (Tri) and other decisions had allowed the appeal and set aside the interest and penalty. In this regard, I find that the Tribunals Principal Bench at Delhi on identical issue in the case of Gurhmehar Construction Vs CCE Raipur (supra) had allowed the appeal by relying Honble High ....

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....he interest would be payable from the date Cenvat credit is taken or utilized wrongly." Thus, the averment by the Honble Single Member of CESTAT in case of Dr. Reddys Laboratories Ltd. (supra) that the Honble Karnataka High Court has been rather careless while considering and analyzing the judgment of the Honble Supreme Court in case of M/s. Indo-Swift Laboratories Ltd. mainly on the basis of two small sentences viz. Actually the credit is taken at the time of removal of the excisable product. It is in the nature of set off or an adjustment is totally untenable particularly because, these sentences are in no way crucial for the conclusion arrived at by the Honble Karnataka High Court. Indeed, even if these sentences did not ....

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....se (i) within the same month is not necessarily equivalent to before any liability to pay any duty arose because in a case where no clearances took place for several months, no liability to pay any duty would arise for several months, and (ii) in Rule 14 of Cenvat Credit Rules, 2004 there was no provision (implicit or express) which makes any distinction between reversal before utilization of wrongly taken Cenvat credit within the same month (or before the liability to pay any duty arose) or otherwise. Thus, reversal before utilization of wrongly taken Cenvat credit within the same month or before any liability to pay duty arose in no way affects or impacts the reasoning or principle contained in the judgment of Honble Karnataka High Court....