2017 (9) TMI 609

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.... has been filed by HYT Engineering Co. P. Ltd. against demand of interest on the credit reversed by them without utilising the same.  In this case penalty has also been imposed for availing credit without support of any documents.  They have also challenged this penalty. 2. Ld. Counsel for the appellant relied on the decision of Hon'ble High Court in the case of Bill Forge P. Ltd.....

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....distinguished the decision of Indswift Laboratories Ltd.  The Hon'ble High Court of Karnataka has observed as follows:- "22. In the instant case, the facts are not in dispute. The assessee had availed wrongly the Cenvat credit on capital goods. Before the credit was taken or utilized, the mistake was brought to its notice. The assessee accepted the mistake and immediately reversed the ....

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....is not put to any loss at all. When once the wrong entry was pointed out, being convinced, the assessee has promptly reversed the entry. In other words, he did not take the advantage of wrong entry. He did not take the Cenvat credit or utilized the Cenvat Credit. It is in those circumstances the Tribunal was justified in holding that when the assessee has not taken the benefit of the Cenvat credit....

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....ould arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise." 5. In view of the above, in a situation where credit is reversed prior to utilisation thereof interest cannot be demanded.  In the instant case it is seen that the show-cause notice in para 3 thereof confirms that the assessee has not utilised the said credit.&....