2008 (4) TMI 129

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... SDR, for the Respondent. [Order]. - After hearing both sides on the stay application, the pre-deposit is waived and the appeal itself is taken up for disposal with the consent of both sides. During October, 2006 to January, 2007, the appellants M/s. Kyung shin Industrial Motherson Ltd. (KIPL), Padappai took credit of above Rs. 83 lakhs being tax paid on input service relatable to its new unit ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..../- was also imposed on KIPL under Rule 15(3) of CCR in the impugned order. The appeal seeks to vacate this order. 2. In the appeal filed and through the ld. Counsel, the appellant has submitted that interest is demandable only if the amount of credit taken wrongly had been utilized. In their case the credit was not utilized and was reversed. Credit taken was not with any intention to evade duty....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....judgment of Rajasthan High Court in Lucid Colloids Ltd v. UOI [2006 (200) EL.T. 377(Raj)] to the effect that "Section 11AB clearly relates to a charge of interest related to amount in default for the period, the assessee remains in default of payment". Section 11AB provided for compensating the State for use of money belatedly paid to the exchequer for the duration of its use by the assessee. (....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s for collection of interest in cases where credit is taken or utilized wrongly. He reiterates the findings in the impugned order. 4. On a careful consideration of the provisions and case law, it is obvious that Section 11AB provides for recovery of interest, on amounts of due duty not paid in time, for the delay in payment. Interest is recovered as compensation to the State for depriving it us....