M/S. Spml Infra Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 311(AKJ)/CE/JPR-I/2011 dated 29/12/2011 passed by Commissioner of Central Excise (Appeals), Jaipur ]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Spml Infra Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Jaipur I

Appearance:

Shri Jatin Mahajan, Advocates for the Appellants

Shri A K Dhawan, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 12.2.2015

FINAL ORDER NO. A/ 50402 /2015-Ex(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order for demanding interest from the appellant.

2. Brief facts of the case are that on 29.11.08, a search was conducted in the factory of the appellant. It was found that appellant has taken inadmissible Cenvat credit on capital goods which they immediately reversed as these goods on which they have taken Cenvat credit were not capital goods. Thereafter on 24.2.2010, a letter was issued to the appellant to pay interest for the intervening period. The appellant challenged the said order before the Honble High Court on the premise that without issuing of show cause notice, interest cannot be demanded. Thereafter the show cause notice was issued to demand interest on 22.11.2010. The demand of interest was confirmed by both the lower authorities. Therefore, appellant is in appeal before me.

3. Learned Counsel for the appellant submits that although they have taken the Cenvat credit but same was lying unutilized in their Cenvat credit account. They have relied on the decision of CCE, Bangalore vs. Bill Forge Pvt. Ltd. [2012 (279) ELT 209 (Kar)], they are not required to pay interest. He also relied on the decision of Hindustan Insecticides Ltd. vs. CCE LTU [2013 (297) ELT 332 (Del) ] to say that in such a case extended period of limitation is not invokable as there is no suppression on the part of the assessee. In these circumstances, he prayed that both on limitation as well as on merits, they are having the case, therefore, impugned order is to be set aside.

4. On the other hand, learned AR submits that the appellants have availed inadmissible Cenvat credit which they were not entitled to and it came to light at the time of search conducted in the factory of the appellant on 29.11.08. If search would not have been conducted, the appellant have availed inadmissible Cenvat credit, therefore, there is suppression of facts and extended period of limitation is rightly invoked. He also relied on the decision of Ind swift Laboratories Ltd. reported as [2011 (265) ELT 3] to say that when the appellant has taken the Cenvat credit wrongly, therefore, they are required to pay interest for the intervening period.

5. Heard the parties. Considered the submissions.

6. In the case of Bill Forge Ltd. (supra) the Honble Karnataka High Court has considered the decision of Ind Swift Laboratories (supra) of Honble Apex Court and thereafter concluded that if Cenvat credit has been wrongly availed but same has not been utilized and lying unutilized in Cenvat credit account. In that case interest is not payable. Admittedly, in this case, Cenvat credit was lying in Cenvat credit account unutilized. Therefore, I hold that as per the decision of Bill Forge (supra), the appellant is not required to pay interest. Further, I find that the fact of availment of inadmissible Cenvat credit came in the knowledge of the department on 29.11.08 and show cause notice for demand of interest was issued on 22.11.10 which is highly time barred. Therefore, relying on the decision of Hindustan Insecticides Ltd., I hold that show cause notice is time barred. In these terms, impugned order is set aside. Appeal is allowed with consequential relief, if any.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

ss

??

??

??

??

2