TaxTMI 
TaxTMI 
2020 (2) TMI 186
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.... goods imported from Hong Kong. Subsequently the adjudicating authority disallowed the Cenvat credittaken on C.R.S.S. Coil and confirmed the demand amounting to Rs. 32,31,489/- (CVD) and Rs. 12,11,838/- (SAD) totaling Rs. 44,43,327/- along with interest and imposed a penalty of equal amount on the appellant company and also imposed a penalty of Rs. 50,000/- upon the Managing Director of the appellant company. It was observed by the adjudicating authority that since the appellant company had already reversed the amount of Rs. 33,36,636/- by way of payment of duty, the same was appropriated against the confirmed demand. On appeal, the learned Commissioner(Appeals) upheld the adjudication order to the extent of confirmation of demand, appropriation of the Cenvat credit already reversed and charging of interest. However, he set aside the penalties imposed on the appellant company and its Managing Director. The appellant assessee is now in appeal before the Tribunal. Department is also in appeal before the Tribunal against setting aisde of the penalties by the learned Commissioner(Appeals) in respect of Excise Appeal No.78602 of 2018. 2. Shri Ankit Kanodia, learned Chartered Accounta....
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.... Tribunal in the assessee's own case vide Final Order No.FO/76092/2018 dated 19.03.2018. Para 5 of the aforesaid order is reproduced:- "5. The ld.Counsel appearing on behalf of the appellant submits that the managing director of the appellant company filed a separate appeal before this Tribunal which was remanded to the Commissioner(Appeals). It is submitted that the Comm (A) vide OIA No.574/HWH/CE/2017-18 dated 20.02.2018 allowed the appeal of the Managing Director in remand proceedings. The ld.Counsel further submitted that as per Rule 14 of Cenvat Credit Rules, 2004, interest can be levied only when Credit has been taken and utilized by the assessee. However, since in the instant case, the appellant had reversed the credit, interest cannot be levied. I find force in the submission of the ld. Counsel." 4. The learned Authorized Representative appearing on behalf of the department, justifies the impugned order regarding the confirmation of demand and interest and reiterates the grounds of appeal in respect of department's appeal for upholding the penalties imposed by the adjudicating authority. The learned Authorized Representative further submits that though the appellants in....
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....aforesaid discussion what emerges is that the credit of excise duty in the register maintained for the said purpose is only a book entry. It might be utilised later for payment of excise duty on the excisable product. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. It matures when the excisable product is received from the factory and the stage for payment of excise duty is reached. Actually, the credit is taken, at the time of the removal of the excisable product. It is in the nature of a set off or an adjustment. The assessee uses the credit to make payment of excise duty on excisable product. Instead of paying excise duty, the cenvat credit is utilized, thereby it is adjusted or set off against the duty payable and a debit entry is made in the register. Therefore, this is a procedure whereby the manufacturers can utilise the credit to make payment of duty to discharge his liability. Before utilization of such credit, the entry has been reversed, it amounts to not taking credit. Reversal of cenvat credit amounts to non-taking of credit on the inputs. 21. Interest is compensatory in character, and is imposed on....
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....an entry in the Modvat record and was not in fact utilised. The Tribunal held that in absence of utilisation of credit, the assessee was not liable to pay interest. The relevant para of the decision is quoted below:- "3. We have heard learned Counsel for the appellant. 4. Learned Counsel for the appellant is unable to show as to how the interest will be required to be paid when in absence of availment of Modvat credit infact, the assessee was not liable to pay any duty. The Tribunal has clearly recorded a finding that the assessee did not avail of the Modvat credit in fact and had only made an entry. 5. In view of this factual position, we are unable to hold that any substantial question of law arises." 12. The above decision of the Hon'ble Punjab & Haryana High Court has been upheld by the Hon'ble Supreme Court as reported in Commissioner v. Maruti Udyog Ltd. - 2007 (214) E.L.T. A50 (S.C.) 13. Further, in CCE, Ghaziabad vs. Ashoka Metal Decor (P) Ltd.[2011 (21) S.T.R. 469 (All.)] the Hon'ble High Court held that when the wrong credit is not utilized for payment of final output duty on final products, neither the assessee gets any advantage nor there is any Revenue loss to....