2013 (11) TMI 1672 - AT - Central Excise

Summary

Issues involved: Availing wrong CENVAT credit, confirmation of interest and penalty.

Availing wrong CENVAT credit: The appellants availed CENVAT credit of duty paid on inputs wrongly to the extent of Rs. 14,56,622/- for the period July 97 to December 1999. The mistake was due to adopting the invoice value instead of duty amount for 8 entries, which was acknowledged by the appellants and the credits were reversed.

Confirmation of penalty: The challenge was against the confirmation of interest and penalty of the same amount imposed on the appellants. The Tribunal noted that the appellants, being a Public Sector Unit, had no mala fide intention in taking the excess credit unintentionally. Considering the limited number of invoices involved over a 2-year period, the penalty was set aside by extending the benefit of doubt to the appellants.

Confirmation of interest: The appellant contended that although they had taken excess credit, it was not utilized as they always maintained a balance equal to the wrong credit amount of Rs. 14,56,662/-. Citing a decision of the Hon'ble Karnataka High Court, it was argued that if the excess credit remains unutilized as a paper entry, no interest should be levied. As the factual position was not clear, the matter was remanded to the adjudicating authority to verify the appellant's claim and decide on the interest issue based on the Karnataka High Court decision.

The appeal was disposed of with the above considerations.