TaxTMI 
TaxTMI 
2019 (2) TMI 474
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....served that they were not eligible for availing CENVAT credit of service tax paid on various other services as the said services were not used for any output service. The audit party directed that the said amounts be reversed along with interest. Correspondence was exchanged between appellant and the revenue department. It was the case of appellant that they had reversed the CENVAT credit in October, 2008 itself before the audit could point out. The Dy. Commissioner of Customs, Central Excise and Service Tax, by a letter dated 12.10.2010, accepting fact that appellant had reversed the CENVAT credit, on the direction of the audit party, had not paid interest, accordingly demanded the said interest and specifically stating therein that there ....
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....ed. 4. Learned departmental representative, on the other hand, after drawing our attention to various documents submits that the audit of the records was conducted in March, 2009 and immediately audit party issued notice for reversal of CENVAT credit along with interest. It is his submission that appellant informed department about the reversal of the CENVAT credit but did not pay the interest on the ground that the amount of credit availed by them is not utilized. It is his submission that after much correspondence was entered into, the Dy. Commissioner by letter dated 12.10.2010 has demanded the interest clearly stating that there is no requirement for issuance of show cause notice as it is an admitted fact that appellant availed ineli....
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....olved. We find that there is no dispute as to the fact that appellant was not issued a show cause notice. The Dy. Commissioner of Customs, Central Excise & Service Tax, Warangal Division, by letter dated 12.10.2010 has demanded interest on the amounts reversed by the appellant and also specifically states that as per Rule 14 of CENVAT Credit Rules, there is no requirement for issuance of show cause notice. We find that lower authorities have totally erred in entertaining such a view while demanding interest without issuance of show cause notice. We find that majority decision in the case of Paper Products (supra) in Para 26.1 and Para 29 as held under. "26.1. ................The question whether a party should be put to notice or not bef....
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.... in law. I also concur with his view that penalty is imposable under Rule 27 of Central Excise Rules, 2002, for default in payment of interest. The concept of revenue neutrality has nothing to do with the payment of interest on delayed payment of duty. However, I agree with Hon'ble Member (Judicial) that a show cause notice should be issued for recovery of interest separately within a reasonable period if there is no demand for duty. If there is a notice for demand of duty, then no separate notice is required for recovery of interest. With these observations, I return the reference to the Original Bench for further necessary action." 7. The ratio of the majority decision on the case is directly on the issue in the case in hand and hence ....