AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 794
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....between the visit of the Audit party to the appellants premises on 26.10.2010 to 02.11.2010 upto the issuance of Show cause notice on 20.3.2013. It has been submitted by the appellant vide their letter dated February 27, 2012 that they have already reversed back the required amount of cenvat credit of Rs. 50.25 lakh as per the requirement of Cenvat Credit Rule 6(3) of 2004 and it was also mentioned that since there have never been no negative credit in the books of accounts and balance of cenvat credit has always been more that what was required for reversal back of cenvat credits as per the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 and therefore, interest on non-reversed amount is actually not leviable as they have only taken the credit and not utilized the same. The appellant however, had deposited the interest of Rs. 7,78,260/- vide challan No. 01921 dated 31.3.2012 on the insistence of the Department. 2. The Department after due inquiries have issued a show cause notice dated 20.3.2013 where under the cenvat credit amounting to Rs. 50,25,246/- has been demanded as per the provisions of Section 73(1) of Finance Act, 1994 read with Rule 14 of Cenvat Credit Rules, 2004....
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....at Credit Rules, 2004 and therefore the payment of interest as per the provisions of section 75 of Finance Act 2004 read with rule 14 of Cenvat Credit Rules is actually not applicable in their case. Still succumbing to the pressure of the department, an amount of Rs. 7,78,260/- has already been deposited by them towards interest vide challan No. 01921 dated 31.3.2012. It has been the contention of the appellant that though the show cause notice should not have been issued to them, still the department has issued the show cause notice invoking the penal provisions also. The learned advocate has mentioned that as per the judgement of Commissioner of Central Excise and Service Tax, LTU Bangalore vs. Bill Forge Pvt. Ltd. reported in [2012 (279) ELT 209 - Karnataka High Court (which has also been endorsed by Apex Court) whereunder the Hon'ble Karnataka High Court has held that reversal of cenvat credit on its own before the utilization of such credits amounts to non taking of cenvat credit and it is further been added that the interest will be leviable only if wrongly availed cenvat credit had been utilized by the assessee. 7. The learned advocate has also relied upon several decisions....
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.... In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty." 9. The learned advocate has also taken shelter of following case laws while advancing his case that penalty under Section 78 of Finance Act, 1994 read with Rule 15(3) of Cenvat Credit Rules, 2004, is not imposable in their case. 1. Northern Coalfields Ltd. vs CCE, Bhopal [2017]63 GST 390 (New Delhi-CESTAT); 2. Castrol India Ltd. v. CCE, Vapi [2013} 291 ELT 469 (Ahmadabad -CESTAT); 3. Rohan Builders (India) Pvt. Ltd. vs. CCE & ST Pune Appeal No. ST/85691 dated 05.12.2018 (Tri-Mumbai) 4. Escorts Ltd. vs CGST CC & CE Dehradun Appeal No. E/51664/2018 SMC dated 08.08.2018 (Tri-Delhi); 5. Grasim Bhiwani Textiles Ltd. vs. CCE, Rohtak [2016 (332) ELT 865 (Tri-Del)]; 6. Rallison Electricals Ltd. vs. CCE, Alwar Apepal No. 51040/2017 dated 30.08.2017 (Tri-Delhi) 10. We have also heard learned Departmental Representative who has reiterated t....
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......." 12. It can be seen that as per the provisions of section 73 (3) if the element of fraud, collusion, willful mis-statement or suppression of facts of contravention of any of the provisions of Finance Act with an intent to evade payment of service tax are not present. In that case, if the assessee deposits any short payment of service tax along with due interest before issue of Show cause notice, in that case no show cause notice is required to be issued as per the provisions of above mentioned section 73 (3) of the Finance Act. We find that the element of fraud, collusion, willful mis-statement or suppression of facts or contravention of any of the provisions of Finance Act with an intent to evade payment of service tax are not present at all in the case in hand as the appellant themselves have reversed back the cenvat credit which was required to be reversed in compliance to the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 and same has been duly reflected in their financial account including the balance sheet. Thus, the intention of the appellant has never been to misuse the cenvat credit which was not due to them as per the provisions of Cenvat Credit Rules and same ....
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....y admitted the mistake, the assessee is liable to pay interest from the date the entry was made in the register showing the availment of credit. According to the Revenue, once tax is paid on input or input service or service rendered and a corresponding entry is made in the account books of the assessee, it amounts to taking the benefit of Cenvat credit. Therefore interest is payable from that date, though, in fact by such entry the Revenue 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, there is no liability to pay interest. Before it can be taken, it had been reversed. In other words, once the entry was reversed, it is as if that the Cenvat credit was not available. Therefore, the said judgment of the Apex Court has no application to the facts of this case. It is only when the assessee had taken the credit, in other words by taking ....