TaxTMI 
TaxTMI 
2023 (2) TMI 182
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.... 94 of the Finance Act, 1994; b) Set aside the impugned Order-in-Appeal dated 06.03.2013 passed by the Ld Commissioner (Appeals) and allow the appeal in full with consequential reliefs to the Appellants; c) Allow the appellants to avail and utilize the Cenvat Credit amounting to Rs 2,91,17,695/- reversed vide entry Sl No. 9 dated 06.12.2011. d) Set aside the demand of interest of Rs 81,21,004/- confirmed under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act 1944 and recovered under Section 87(b)(i) of the Finance Act. e) Grant a personal hearing; and f) Pass such other order or orders as may be deemed fit and proper in the facts and circumstances of the case." 2. During hearing learned counsel for the appellant submits that he is pressing only for setting aside of the demand and interest of Rs 81,21,004/- under Rule 14 of the CENVAT Credit Rules 2004 (CCR) read with Section 11AB of the Central Excise Act 1944 (Act) and ordered to be recovered under Section 87(b)(i) of the Finance Act 1994 (Finance Act) and consequential relief. He has specifically said that he is not pressing the prayer to strike down Rules 14 of CCR as ultravire....
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....s UOI [2015(38)STR 907 (Bom)] 4. Learned A.R. for the Revenue supports the impugned order. He submits that the appellant was engaged in and was registered for payment of service tax on advertisement services. It availed CENVAT credit on several input services which were not input services for the advertisement services. On being pointed out by the audit, the appellant reversed the CENVAT credit on 06.12.2011. However, it had not paid the interest on the irregularly availed CENVAT credit. Therefore a letter dated 31.03.2012 was issued to the appellant by the Superintendent which states as follows: "Please refer to the Service Tax Audit conducted by the Department on various dates in the months of October & November 2011, on the accounts of your Channel. The said Audit covered the period from April 2008 to March 2011. Copy of the Audit Report referred above is enclosed for your information. 2. Para 1 of the Audit Report deals with the excess availment of Cenvat Credit of input service tax to the tune of Rs 2,91,17,695/- which has been reversed by you vide Entry Sl No. 9 dated 06.12.2011 in your Cenvat Credit Register. The issues lies here is that an interest component of Rs 81,2....
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....ssee had during the relevant period availed CENVAT credit wrongly but had not utilized it whether interest is still payable? This question was answered by the Hon'ble Supreme Court in UOI & Others Vs Ind-Swift Laboratories Ltd [2011(2) TMI 6-SC]. Paragraph 17 & 20 are reproduced below:- "17. We have very carefully read the impugned judgment and order of the High Court. The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High Court on a conjoint reading of Section 11AB of the Act and Rules 3 & 4 of the Credit Rules proceeded to hold that interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down with....
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....rabad]. 7. In so far as the judgement of the Hon'ble High Court of Karnataka and the case of the Bill Forge was concerned learned A.R. submits that the facts of that case were different inasmuch as the assessee had neither availed nor utilized the CENVAT credit but had only entered the details of the inputs in its accounts. Paragraph 6 of the order is reproduced below: "6. Per contra, the learned Counsel appearing for the assessee pointed out that Section 11AB expressly provides that the interest is payable from the day the duty is payable, in order to compensate the Revenue for the loss sustained on account of delayed payment of duty. Even in Rule 14 on which reliance is placed, the word used is "taken or utilized wrongly". It does not mean that when an entry is made in the account book showing that assessee is entitled to take credit of the duty paid on inputs or capital goods or input services the assessee is benefited to any extent. It is only, when that credit is taken or utilized to discharge the liability to pay duty he is benefited. If the said credit is taken wrongly, the liability to pay interest arises. In the instant case, though the entry was made in the account boo....
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....in the Finance Act 1994 under which a notice to recover interest due can or must be issued. Therefore, there is no infirmity in the procedure followed by the officers and have been correctly upheld by the Commissioner (Appeals) in the impugned order. 10. We have considered the submissions of both sides and perused the records. Of the several clauses of the prayer in the appeal, the only one pressed by the learned counsel is regarding the liability of interest. According to the learned counsel for the appellant in the first place, interest cannot be charged because it had availed CENVAT credit but not utilized it. Learned counsel fairly submits that Rule 14 of CCR as applicable during the relevant period provided for interest to be recovered where CENVAT credit has been availed or utilized wrongly. However, according to him if CENVAT credit was not utilized and has been reversed, mere availment of CENVAT credit does not cause any prejudice to the Revenue and therefore the appellant should not be asked to pay interest. We cannot agree with learned counsel's submissions. As applicable during the relevant period, Rule 14 of CCR provided for interest where CENVAT credit was availed or ....