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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2021 (5) TMI AT This

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2021 (5) TMI 852 - AT - Central Excise


Issues:
1. Whether interest of ?4,10,480/- is payable on the excess credit availed during the relevant period?
2. Whether penalty of equal amount is imposable on the appellant?

Analysis:
1. The appellant, engaged in manufacturing packing materials, carried forward excess credit in their CENVAT account due to a clerical error during a software system switch. The excess credit was reversed upon audit scrutiny, but interest was not paid. The appellant argued that the demand notice for interest was time-barred, citing precedents. The tribunal found the argument devoid of merit, distinguishing the cited judgment where interest was demanded much later. In this case, interest was demanded within a year of the credit reversal, thus not barred by limitation.

2. Regarding the penalty imposed equal to the reversed credit amount, the tribunal agreed with the appellant's contention that it was a bona fide mistake during the software switch. No evidence of intentional misrepresentation was found. Therefore, the imposition of an equivalent penalty was deemed unwarranted. The tribunal modified the order, requiring the appellant to pay the interest amount only, which had already been reversed, and setting aside the penalty imposition under Rule 15(2) of CCR, 2004.

This judgment highlights the importance of timely compliance with interest payments on excess credits and the necessity of evidence to support penalty imposition in cases of inadvertent errors.

 

 

 

 

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