2017 (5) TMI 1247

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....tal goods and service tax paid on input service in terms of Cenvat Credit Rules, 2004. During the period 01.04.2005 to 30.10.2006 the appellants have availed erroneously, cenvat credit of service tax paid on certain services. The appellant claimed that they have taken the credit of Rs. 2,47,93,141/- due to error in computer system, which resulted in double entries. The said error was detected by the appellant in the month of October, 2006 and they have reversed the erroneous excess credit in the month of March, 2007. They indicated such reversal in the ER-1 return meant for March, 2007 filed with the Department on 09.04.2007. The appellant also paid interest of Rs. 3,91,051/- towards credit which has been actually used by them (out of such ....

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....st. There is no legal basis to demand the said amount in cash again. There is no ground at all to invoke penal provision against the appellant. Regarding interest he relied on certain case laws to submit that the interest is applicable only on that portion of credit utilised in discharging tax liability of their final product. They always carry substantial credit balance and the erroneous credit was never used to discharge liability. Only amount of Rs. 52,56,721/- was utilised out of erroneous excess credit in the month of August, 2006 for which the applicable interest has been calculated and discharged on 30.05.2007. 3. Ld. AR for the Revenue submitted that the appellant have taken huge cenvat credit attributing error of computer progra....

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....ns of this Tribunal and Hon'ble High Court. Reference can be made to the decision of Hon'ble Madras High Court in the case of CCE, Madurai Vs. Strategic Engineering - 2014 (310) ELT 509 (Mad.) and the decision of the Tribunal in Grasim Bhiwani Textiles Vs. CCE, Rohtak - 2016 (332) ELT 865 (Tri. Del.). The Tribunal relying on the decision of Hon'ble Karnataka High Court in the case of CCE&ST, Bangalore Vs. Bill Forge Pvt. Limited -2012 (26) STR 204 (Kar.) held that before utilisation of credit if the same has been reversed will amount to not taking credit and would not attract liability of interest. Here we note that the ld. AR relied on the decision of the Hon'ble Supreme Court in the case of Union of India vs. Ind-Swift Laboratories Limite....