TaxTMI 
TaxTMI 
2024 (5) TMI 131
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....d. 2. The brief facts of the case are as detailed below:-- 2.1 The ST--3 returns of the Appellant for the period November 2009--September 2010 were verified by the department and it appeared that the entire CENVAT credit of capital goods to the tune of Rs.1,95,38,163 was availed instead of 50%-- Rs.97,96,082/-- as stipulated under Rule 4(2)(a) of CCR,2004 which is reproduced below:-- "(2) (a) The CENVAT credit in respect of capital goods received in a factory or in the premises of the provider of output service at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent. of the duty paid on such capital goods in the same financial year:" 2.2 On verification of documents of Appellant for the period from November 2009--December 2010, it appeared that they have availed ineligible CENVAT Credit of Rs.2,23,468/-- on Customs cess in respect of 11 Bills of Entry. On being pointed out the Appellant reversed the Credit in their CENVAT account on 11.01.2011. 2.3 On verification of CENVAT documents and ST--3 returns for August 2008 to October 2009, it appeared that the Appellant had availed credit of Rs.44,71,691/-- based ....
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....inted out that the same was reversed before utilization and hence interest was not liable to be paid relying on the decision of the Hon'ble High Court of Madras in the case of Commissioner of Central Excise Vs. Strategic Engg. Pvt. Ltd. [2014--TIOL--466--HC--Mad--CX], which has held that interest cannot be demanded if CENVAT Credit taken only but not actually utilized. It reads as follows:-- "10. In fact, this Court has perused the entire decision reported in 2012 (26) S.T.R. 204 (Karnataka) (Commissioner of Central Excise & S.T., Bangalore v. Bill Forge Private Limited) and ultimately found that mere taken of CENVAT credit facilities is not at all sufficient for claiming of interest as well as penalty. 11. It is an admitted fact that Rule 14 of the Cenvat Credit Rules as been subsequently amended, wherein it has been clearly stated as "taken and utilised". Therefore, it is quite clear that mere taking itself would not compel the assessee to pay interest as well as penalty. Further, as pointed out earlier, the subsequent amendment has given befitting answer to all doubts existed earlier. Since, the subsequent amendment has cleared all doubts existed earlier in res....
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.... before the eligible dates and there were no undue benefits to the Appellants. It was further submitted that all the details were duly furnished in their ST--3 returns and the relevant invoices and bills of entries based on which credit was taken were also made available to the department and hence under the circumstances, it was averred the allegation of deliberate suppression with an intent to evade on a Public Sector Undertaking owned by the Government of India was not sustainable. It was also averred that the SCN was issued on 30.09.2013 well beyond the actual cut--off date for issue of SCN i.e 25.04.2011 / 25.10.2011, as the case may be and hence extended period could not be invoked. 5.2 The Ld. Advocate placed reliance on the ratio of the following decisions:-- (i) Commissioner of Central Excise, Chennai--I Vs. Chennai Petroleum Corporation Ltd. [2007 (211) ELT 193 (SC)] (ii) Indian Oil Corporation Ltd. Vs. Commissioner of Central Excise, Ahmedabad [2013 (291) ELT 449 (Tri.--Ahmd.)] (iii) Commissioner of Central Excise, Indore Vs. Nepa Ltd. [2013 (298) ELT 225 (Tri.--Del.)] (iv) Commissioner of Central Excise, Allahabad Vs. Bharat Yantra....
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....ction 73 of Finance Act, 1994 has been rightly invoked. Hence Appellants were liable to pay interest and penalty. 6.5 He has placed reliance on the ratio of the judgment of the Hon'ble Supreme Court in the case of M/s. Ind Swift Laboratories Ltd. [2011 (265) ELT 3--Supreme Court] wherein it was held that:-- "15. In order to appreciate the findings recorded by the High Court by way of reading down the provision of Rule 14, we deem it appropriate to extract the said Rule at this stage which is as follows:-- "Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded:-- Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of Sections 11A and 11AB of the Excise Act or Sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries." 16. A bare reading of the said Rule would indicate that the manufacturer or the provider of the output service becomes liable to pay interest along with the duty where CENVAT credit has been taken or utilized wrongly....
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....lment of CENVAT credit and that it should only be payable from the date when CENVAT credit is wrongly utilized. Besides, the rule of reading down is in itself a rule of harmonious construction in a different name. It is generally utilized to straighten the crudities or ironing out the creases to make a statute workable. This Court has repeatedly laid down that in the garb of reading down a provision it is not open to read words and expressions not found in the provision/statute and thus venture into a kind of judicial legislation. It is also held by this Court that the Rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. ------------ 20. Therefore, the attempt of the High Court to read down the provision by way of substituting the word "OR" by an "AND" so as to give relief to the assessee is found to be erroneous. In that regard the submission of the counsel for the appellant is well-founded that once the said credit is taken the beneficiary is at liberty to utilize the same, immediately thereafter, subject to the Credit rules." 7. Heard both sides and carefu....
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....--ordinate Benches of the Tribunal in the following decisions among others:-- i. Commissioner of Central Excise and Service Tax, LTU, Bangalore Vs. Bill Forge Pvt. Ltd. [2012 (279) ELT 209 (Kar.)] ii. M/s. SAIL Vs. Commissioner of GST and Central Excise, Bolpur [E/78557 of 2018 dated 20.09.2019] 11.2 The relevant portion of the judgment of the Hon'ble High Court of Karnataka in the case of Bill Forge Pvt. Ltd. (supra) is extracted below:-- "7. In the light of the aforesaid material on record and rival contentions, the substantial question of law that arises for consideration in this appeal is as under : "The words "Cenvat Credit has been taken", does it mean making an entry in the account books showing the entitlement of the said credit? or does it mean the said credit found in the account books actually taken while clearing the finished products.?" ..... ...... ..... 19. Rule 14 of the CENVAT Credit Rules, 2004 reads as under : Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded. -- Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the....
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....n delayed payment of duty i.e., where only duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person liable to pay duty, shall in addition to the duty is liable to pay interest. Section do not stipulate interest is payable from the date of book entry, showing entitlement of Cenvat credit. 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 taken or utilized wrongly. 22. In the instant case, the facts are not in dispute. The assessee had availed wrongly the Cenvat credit on capital goods. Before the credit was taken or utilized, the mistake was brought to its notice. The assessee accepted the mistake and immediately reversed the entry. Thus the assessee did not take the benefit of the wrong entry in the account books. As he had taken credit in a sum of Rs. 11,691--00, a sum of Rs. 154--00 was the interest payable from the date the duty was payable, which they promptly paid. The claim of the Revenue was, though the assessee has not taken or utilized this Cenvat credit, because they admitted the mistake, the assessee is lia....
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....st as well as penalty. Further, as pointed out earlier, the subsequent amendment has given befitting answer to all doubts existed earlier. Since, the subsequent amendment has cleared all doubts existed earlier in respect of Rule 14 of the said Rules, it is needless to say that the argument advanced by the learned counsel appearing for the appellant/Department is erroneous, whereas the argument advanced on the side of the respondent is really having merit and the substantial questions of law settled in the present Civil Miscellaneous Appeal are not having substance and altogether the present Civil Miscellaneous Appeal deserves to be dismissed." 11.4 In the case of J.K. Tyre and Industries Ltd. Vs. Assistant Commissioner of Central Excise, Mysore [2016 (340) ELT 193 (Tri.--LB)], Tribunal Large Bench has come to the conclusion that interest liability would not arise when the assessee had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty. 11.5 The same view was taken by the Tribunal in the following cases:-- i. Commissioner of Central Excise Vs. Sharda Energy & Minerals Ltd. [2013 (291) ELT 404 (Tri.--Del.)] ....
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....on behalf of Coimbatore SSA had been distributed to Coimbatore SSA through an Advice of Transfer Debit; CTSD, Bangalore, Karnataka Circle was a registered Input Service Distributor since March 2006; hence, there was no contravention of Rule 9 of CENVAT Credit Rules, 2004. 13. We find that the appellant is a Government owned company and it has got different circles, operational areas and divisions, as such discrediting these documents for the purpose of availment of CENVAT Credit is not legal and proper. Unless there is an allegation that the capital goods are diverted or not installed in the appellant's premises, it has to be held that the appellant is eligible for the CENVAT Credit availed. 14. On the issue of invoking the extended period, the Ld. Advocate Shri S. Durairaj has argued that major portion of the CENVAT Credit taken in their books was not utilized before the eligible dates and the appellant has not got any benefit of taking such credit into their books. He has further submitted that all the details were duly furnished to the Department in their ST--3 Returns and the relevant invoices and other documents based on which credit was taken were also made available to....