TaxTMI 
TaxTMI 
2016 (8) TMI 6
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....them. The Assessee is registered with re Service Tax Department for the purpose of payment of Service Tax under the category of 'Site Formation and Clearance, Excavation and Earth Moving and Demolition' Services w.e.f. 16.06.2005. For the purpose of undertaking the transportation activities the Assessee procured Volvo Tippers falling under Central Excise Tariff head 8704.23.90 after payment of applicable Central Excise duty and took credit of the excise duty paid on tippers. 3. The Appellant was issued with a Show Cause Notice No. C.No. V (ST)/15/24/2008-Adj, O.R.No.11/2008-S.Tax dated 16.04.2008 proposing to deny the CENVAT Credit of Rs. 6,60,61,607/-availed on the Volvo Tippers procured from Volvo, under rule 14 of the CENVAT Credit Rules, 2004 read with Section 73 of the Finance Act, 1994 plus interest thereon and penalties. Order-in-Original 01/2008 dated 12.03.2008 confirmed the demand of Rs. 6,60,61,607/- as proposed in the Show Cause Notice confirmed the levy of interest under Rule 14 of the CENVAT Credit Rules, 2004, imposed penalty of Rs. 60,00,000/- under Rule 15 of the CENVAT Credit Rules, 2004 and penalty of Rs. 1,000/- und....
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....tion of money, Abati Bezbaruah Vs. DY D.G., AIR [2003 SC 1817 (1819): (2003) 3 SCC 1481 (Motor Vehicles Act, 1988, s. 171) 'Interest' is a payment which becomes due because the creditor has not had his money at the due date. It may be regarded either as representing the profit he might have made if he had the use of money, or conversely the loss he suffered because he had not that use. The general idea is that he is entitled to compensation for the deprivation. [Riches v. Westminster Bank Ltd., [1947 AC 390, 400: (1947) 1 All ER 469 (472) E-F] cited in Punjab and Sind Bank v. Allied Beverage co. (P) Ltd., [(2010) 10 SCC 640 (646)], para 18]" 8. Viewed in this context, the mere taking of non-entitled credit by way of a book entry will in no way cause financial adversity to the exchequer, unless such ineligible credit comes to be utilized. We therefore find that by stretch of imagination can the act of taking ineligible credit, however reversing the entire wrongly taken credit without utilization, be considered as creating a right for the government for forbearance or detention of money, or for that matter, loss suffered because the government had not that use. When credit has....
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....it we quote hereinbelow the following para from the judgment of this Court in Collector of Central Excise v. Dai Ichi Karkaria Ltd. reported in 1999 (112) E.L.T. 353. (S.C.) "It is clear from these Rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible. It should also be noted that there is no co-relation of the raw material and the final ....
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....excise duty on excisable product. Instead of paying excise duty, the cenvat credit is utilized, thereby it is adjusted or set off against the duty payable and a debit entry is made in the register. Therefore, this is a procedure whereby the manufacturers can utilise the credit to make payment of duty to discharge his liability. Before utilization of such credit, the entry has been reversed, it amounts to not taking credit. Reversal of cenvat credit amounts to non-taking of credit on the inputs. 11. Even the High Court of AP & T, which is the jurisdictional High Court for this Bench, in Commissioner Cus, CE & ST Vs Bharat Dynamics Ltd., [2016 (331) ELT 182 (A.P.)] after referring to the Indo Swift Laboratories case (supra) held the contention of the Revenue that when credit is wrongly taken the assessee is liable to pay interest to be unsustainable. The relevant portion of the judgment is reproduced below: 5. The Tribunal, in its order dated 22-10-2013, has recorded the following findings : "In our opinion, the appellant has definitely a case for seeking clarification from the department. In March, 2010, the appellant sought clarification from the departmen....
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....cation from the department, they took CENVAT credit during the intervening period i.e. from September, 2010 to March, 2011. It is also clearly observed that after getting clarification from TRU in April, 2011, the appellant reversed the entire amount of Cenvat credit. In that view of the matter, the specific contention put forth by the learned standing counsel that the respondent-assessee, without any eligibility, has taken the Cenvat credit, as such, they are liable to pay interest, is not sustainable. 7. In view of the categorical findings of fact recorded by the Tribunal and there being no material to disprove those findings, we are of the considered opinion that there is no perversity in the order of the Tribunal and it is purely a question of fact and there is no question of law much less substantial question of law warranting interference by this Court. 12. The assesses has also appealed against the imposition of penalty. We find that in the SCN, penalty was proposed in terms of Rule 15 of CCR, 2004 read with Section 11 AC of the Central Excise Act, 1944. However, the adjudicating authority did not find much force for imposing penalty under section 11 AC or R....