Commissioner Of Central Excise vs Jai Bharat Steel Company
- CitationAppeal No. : E/1354/2009
Ratio decidendi
The rule this decision rests on
Interest under the Cenvat Credit rules is not payable merely because credit was wrongly taken and subsequently reversed; where the assessee had not utilised the wrongly availed credit and it remained lying unutilised in its credit account, no interest liability arises on that amount.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes
CORAM :
Mr. P.K. Das, Hon'ble Member (Judicial)
Date of Hearing / Decision : 12/2/2015
ORDER No. A/10354 / 2015 dtd 12/2/2015
Per : Mr.P.K. Das,
None appears on behalf of the respondent. There is an application dtd February 11, 2015 requesting for adjournment.
2. After hearing the Learned Authorised Representative for the Revenue and on perusal of records, I find that the appeal may be decided, in the absence of the respondent. The issue involved in this case is whether interest is payable on the Cenvat Credit availed wrongly and subsequently reversed. On perusal of the impugned order, I find that the findings of the Commissioner (Appeal) that the respondent had not utilised the credit. The relevant portion of the impugned order is reproduced below :
Honble High court of Gujarat in the case of Commissioner of Central Excise vs Gupta Steel reported at 2006(205)ELT 24 (Guj) has held that interest is not be levied on amount of credit directed to be reversed when such credit was not availed by the assessee but lying unutilised. I find that appellants contentions is that they are having sufficient balance in their Modvat Credit account and therefore it is to be inferred that the amount of Rs 15,61,489/- was lying unutilised by them and hence they are not liable to pay interest. Further they have given the closing balance of each month of their cenvat account.
3. Learned Authorised Representative for the Revenue submits that the Honble Supreme Court in the case of UOI vs Ind-Swift Laboratories 2011(265)ELT.3 (SC) held that interest is payable on irregular availment of the cenvat credit on the date of taken the credit, even not utilised. He also relied upon the decision of the Division Bench of this Tribunal in the case of Essar Oil Ltd vs CCE&ST Rajkot 2014(309).ELT.336 (Tri. Ahmd).
4. I find that the Honble Karnataka High Court in the case of Commissioner of Central Excise & Service Tax, Bangalore Vs. Bill Forge Pvt Ltd 2012(279)ELT 209 (Kar.) and the Honble Madras High Court in the case of the Commissioner of Central Excuse, Madras vs M/s Strategic Engg. (P) Ltd 2014.TIOL.466.HC.MAD.CX after considering the decision of the Honble Supreme Court in the case of Ind-Swift Laboratories (supra) held that mere taking credit itself and reversal, would not compel the assessee to pay interest an rejected the appeals of Revenue.
5. In view of the above discussion, I do not find any merit in the appeal filed by the Revenue. Accordingly, appeal filed by the Revenue is rejected.
(Dictated and pronounced in the Court)
(P.K. Das) Member (Judicial)
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