M/S. T.V. Sundram Iyengar & Sons Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No.188/2013, dated 28.11.2013 passed by the Commissioner of Central Excise (Appeals), Madurai]

M/s. T.V. SUNDRAM IYENGAR & SONS LTD. APPELLANT

Versus

COMMISSIONER OF CENTRAL EXCISE, MADURAI RESPONDENT

Appearance:

For the Appellant Shri S. Muthuvenkataraman, Adv.

For the Respondent Shri B. Balamurugan, AC (AR)

CORAM:

Honble Shri D.N. Panda, Judicial Member

Date of hearing/decision 06-07-2015

FINAL ORDER NO 40894 / 2015.

Learned counsel fairly submits that Additional Duty of Customs was taken as Cenvat credit without that being permissible. However, when the appellant was legally advised that interest is payable in respect of erroneous utilisation of Cenvat credit in so far as utilisation of Rs.9,14,269/- is concerned, interest was paid, reversing the Cenvat credit along with the other credit amount of Rs.30,00,145/- taken as credit but not utilised. Consequent upon amendment of law relating to Cenvat credit, if there is no utilisation of wrong credit taken, interest is not payable. Only for a transitory period till amendment there was confusion in law as to the payment of interest. However, no demand of interest in above circumstawnce is the law settled in the judgment of Commissioner of Central Excise, Mumbai-I Vs Bombay Dyeing & Mfg. Co. Ltd. reported in 2007 (215) E.L.T.3 (S.C.). Therefore, no adverse view may be taken in absence of any malafide of the appellant. Further, credit having been taken due to confusion no penalty should be imposed. So also no interest may be called for on the amount of Rs.30,00,145/-.

3. Revenue on the other hand opposes aforesaid proposition of assessee.

4. Heard both sides and perused the records.

5. Para 4 of the show-cause notice makes allegation that there was utilisation of Cenvat credit of Rs.9,14,269/- of Additional Duty of Customs taken. But taking of such credit is not permissible. In the case of Bombay Dyeing (supra), it was the observation of the Supreme Court that unless the credit is utilised there shall be no payment of interest. But such proposition of law was not cited before apex court while deciding the case of Indswift. For no utilisation of Cenvat credit, there shall not be payment of interest. Therefore, learned Adjudicating authority is directed to make a limited exercise to verify the quantum of the credit utilised and calculate interest thereon and direct the appellant to pay the same. The payment of interest shall be subject to adjustment if any already paid by the appellant. Therefore, the matter is remitted back to the learned Adjudicating authority to grant fair opportunity of hearing to the appellant on such limited count.

5. Since there is confusion in law as to the admissibility of the credit and also utilisation thereof, there shall not be penalty. The appeal is disposed in the above terms. Stay application is disposed accordingly.

(Dictated and pronounced in open court)

(D.N. PANDA) JUDICIAL MEMBER

ksr 22-07-2015

DRAFT Remarks

I II III

Date of dictation 06.07.2015

Draft Order - Date of typing 18.07.2015 22.07.2015

Fair Order Typing 24.07.2015

Date of number and date of dispatch 27/07/2015

5 E/S/40649/2014 and E/40460/2014