2019 (8) TMI 868

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.... present case are that the appellants are engaged in the manufacture of transistor, inverters falling under Chapter 85 of the CETA, 1985. During the course of audit of the books of accounts of the company in November 2013, it was observed that the company had received certain common input services such as telephone / internet services, manpower supply services, security services, rent paid on immovable property etc. used for trading and manufacturing activities of the company. Since the trading activities are exempted services as per Rule 2(e) of CENVAT Credit Rules, 2004, the company is required to reverse the CENVAT credit pertaining to common input services used in relation to exempted activities i.e. trading in terms of Rule 6(3(A)) of ....

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....raised and the same was also shown in the return filed by the company for February 2014; (iii) on account of inadvertent error, CENVAT credit to the tune of Rs. 30,86,821/- has been reversed in excess; and (iv) since CENVAT credit has been reversed before the issuance of the show-cause notice, interest and penalty are not payable by the company. After following the due process, the original authority vide order dt. 08/02/2017 confirmed the demand and also appropriated the amount already reversed and demanded interest and also imposed 50% penalty. Aggrieved by the said order, appellant filed appeal before the Commissioner(Appeals) who vide the impugned order has held that the appellant had already reversed the entire amount of CENVAT credit ....

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....In support of this submission, he relied upon the decision in the case of CCE Vs. Maruti Udyog Ltd. [2007(214) ELT 173 (P&H)] wherein the Division Bench of the Hon'ble High Court of Punjab & Haryana held that interest is not payable on inadmissible credit taken but not utilized. Similarly, in the following cases, it has been consistently held that if the assessee has not utilized the CENVAT credit, then they are not liable to pay interest:- i. Flextronics Technologies (I) P. Ltd. Vs. CCE, Bangalore [2014(314) ELT 664] ii. CCE, Madurai Vs. Strategic Engineering (P) Ltd. [2014(310) ELT 509 (Mad.)] iii. Nova Petrochemicals Ltd. Vs. CCE, Ahmedabad-II [2015(330) ELT 648 (Tri. Ahmd.)] iv. CCE&C, Vadodara-II Vs.....