TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 302
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....hennai (for brevity, the Tribunal) dated 22.3.2018 in Appeal No.ST/43/ 2010. The Revenue has filed this appeal raising the following substantial question of law : "The Tribunal being creation of the Statute, whether it can traverse beyond the provisions of the CENVAT Credit Rules, 2004, when the same has the force of a Statute ?" 3. There are two issues involved in this appeal, though only one substantial question of law has been raised by the Revenue with regard to demand of interest on the ineligible credit availed by the assessee. The said issue is no longer res integra, as it has been decided in favour of the Revenue by a Division Bench of this Court, to which, one of us (TSSJ) was a party, in the case of CCE Vs. M/s.Sundaram Fastner....
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....dit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service and the issue is as to whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as "AND" by way of reading it down as has been done by the said High Court. Further, the Hon'ble Supreme Court, reading the provision as a whole found that there was no reason to read the word "OR" in between the expressions 'taken' or 'utilized wrongly' or has been erroneously refunded as the word "AND". It was further held that on the happening of any of the three circumstances viz., credit taken or credit utilized wrongly or credit has been err....
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....he submissions made by the learned counsel for the assessee, as the decisions rendered in the aforesaid cases by the Allahabad High Court as well as the Karnataka High Court as well as the Hon'be Supreme Court, arose out of a case where the assessee claimed benefit of an exemption notification. The question which fell for consideration in those cases is as to whether reversal of credit after the removal of the final product would entitle the assessee therein to the benefits of exemption notification, which states that the reversal of the credit should be done before the removal of the products. In such circumstances, the Courts considered the issue and said that for the purpose of extending the benefits of exemption notification, the ti....
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....the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High Court on a conjoint reading of Section 11AB of the Act and Rules 3 & 4 of the Credit Rules proceeded to hold that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. A statutory provision is generally read down in order to save the said provision from being declared unco....
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....rned counsel for the assessee contended that, when credit has been reversed before utilization, the same did not amount to taking credit. 14. We reject the arguments of the assessee. In the said decisions, it has been no doubt held that interest is compensatory and the question arises only where principal is due. If one gets into the background of the scheme of Modvat Credit, his contention that the assessee has taken credit, does not merit consideration, particularly so, in the background of Rule 14. As it stands today, one has to go only by the provisions contained in Rule 14 and nothing beyond." 4. In the light of the above referred to decision, the finding rendered by the Tribunal with regard to levy of interest calls for interferenc....