TaxTMI 
TaxTMI 
2016 (2) TMI 219
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.... refund claim for the same. The department accepted the refund claim of the assessee and later issued a show-cause notice for recovery of interest and imposition of penalty on the said irregularly taken CENVAT credit. The Department in this case after receipt of refund claim application dated 21.10.2009 of the assessee, asked for reversal of CENVAT credit for consideration of their refund claim application; the appellant informed the department through their letter dated 13.11.2009 that they reversed the CENVAT credit. 2.1 The Revenue's main contention for recovery of interest is provisions of Rule 14 of CENVAT Credit Rules, 2004 as existed during the relevant period. The appellant vehemently argues that their initial excess payment of ser....
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....they have not taken wrong credit, no question of its utilization arises and further there was sufficient credit balance all along in their CENVAT credit account, thus there being no occasion to utilize the said CENVAT credit amount. 3.2 In support, the learned advocate cites the Honble Karnataka High Court's judgment in the case of CCE vs. Bill Forge Pvt. Ltd.: 2012 (279) E.L.T. 209 (Kar.) saying that as per this judgment no interest liability or penalty is attracted for this transaction of taking CENVAT credit for the excess payment made of the service tax. He also further cites the following case laws in support:- (i) CCE vs. Pearl Insulation Ltd.: 2012 (281) E.L.T. 192 (Kar.) (ii) CCE vs. Gokaldas Images (P) Ltd.: 2012 (28) S....
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....m was later sanctioned to the assessee. 5.3 The learned AR for the Revenue is taking support mainly from the Honble Supreme Courts decision in the case of UOI vs. Ind-Swift Laboratories (supra) saying that in the present case the appellant has wrongly taken the credit and whether the CENVAT credit is utilized or not is immaterial and as per this decision of the Honble Supreme Court, recovery along with interest is rightly attracted. However, I find that the facts in the cited case, where Union of India filed appeal before the Honble Supreme Court was based on the illegal CENVAT credit taken based on the invoices, where goods never accompanied to the premises of the concerned assessee or its group companies. I find that in the present c....
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....ty would arise only when duty legally due to the Government is not paid. In this regard, let us refer to the Hon'ble Karnataka High Court's above decision; it has inter alia held as below: "20. From the aforesaid discussion what emerges is that the credit of excise duty in the register maintained for the said purpose is only a book entry. It might be utilised later for payment of excise duty on the excisable product. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. It matures when the excisable product is received from the factory and the stage for payment of excise duty is reached. Actually, the credit is taken, at the time of the removal of the excisable product. ....
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....ate CENVAT credit is taken or utilized wrongly." 5.4 From the above it is clear that as there has been no liability to pay service tax on the appellant-assessee, Revenue cannot impose liability to pay interest on the assessee invoking the provisions of Rule 14 of CENVAT Credit Rules, 2004. The facts of this case are very simple, though unique and there has been no revenue loss on any account even for a day to the Revenue; the appellant-assessee paid service tax in excess and had taken CENVAT credit of the same without any malafide intention; therefore, this is only a kind of technical fault committed by the appellant-assessee, where provisions of Rule 14 of CENVAT Credit Rules, 2004 are not strictly attracted. 5.6 When the said technical ....