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2016 (11) TMI 1457 - AT - Central ExciseCENVAT credit - duty paying invoices - appellants produced photocopy of the duplicate copy of Bill of Entry and could not produce original of duplicate copy of Bill of Entry - Held that - the appellant produced the evidence that M/s. Shiva Polyplast Pvt. Ltd., Kanpur, had not availed credit on the basis of the said Bill of Entry and no attempt was made by the department to verify the said evidence - department should have examined the evidences, as placed by the appellant, for the purpose of availing Cenvat Credit - matter is required to be examined by the lower authorities. Interest on CENVAT credit availed wrongly - credit not utilised in terms of rule 14 of CCR, 2004 - Held that - the issue of interest on unutilized reversed credit entry was the subject matter of Hon ble Supreme Court decision in the case of Union of India Vs. Ind-Swift Laboratories Ltd. 2011 (2) TMI 6 - Supreme Court , where it was held that once the entry was reversed, it is as if that the Cenvat credit was not available - interest is not payable on reversal of the unutilized Cenvat Credit - appeal allowed. Appeal allowed in part and part matter on remand.
Issues Involved:
1. Availment of Cenvat Credit on the basis of photocopy of duplicate Bill of Entry. 2. Liability to pay interest on Cenvat Credit wrongly taken but not utilized. 3. Imposition of penalty for irregularly availed Cenvat Credit. Issue-wise Detailed Analysis: 1. Availment of Cenvat Credit on the basis of photocopy of duplicate Bill of Entry: The appellant, M/s. Blossom Polymers (P) Ltd., availed Cenvat Credit of ?1,23,229/- (C.V. Duty) and ?2,465/- (Education Cess) based on a photocopy of the duplicate Bill of Entry No.873513 dated 24.05.2005. The original duplicate copy was with another entity, M/s. Shiva Polyplast Pvt. Ltd., which issued a certificate stating they had not availed credit for the item sold to the appellant. The lower appellate authority disallowed the credit and imposed a penalty of ?1,25,694/-, emphasizing that accepting photocopies would lead to "utter chaos." The Tribunal found that the department should have verified the evidence provided by the appellant and remanded the matter for re-examination by the lower authorities. 2. Liability to pay interest on Cenvat Credit wrongly taken but not utilized: The Revenue appealed against the order that allowed the assessee to avoid interest on ?5,57,970.10 of wrongly taken but unutilized Cenvat Credit. The Tribunal referred to several High Court and Tribunal decisions, including the Supreme Court case of Union of India Vs. Ind-Swift Laboratories Ltd., which clarified that interest is not payable if the credit was reversed before utilization. The Tribunal concluded that mere book entries without utilization do not attract interest, following the principles laid down in cases like CCE & ST Vs. Bill Forge Pvt. Ltd. and CCE Vs. Ashoka Metal Dicor (P) Ltd. 3. Imposition of penalty for irregularly availed Cenvat Credit: The lower appellate authority imposed a penalty of ?1,25,694/- on the appellant for availing credit based on a photocopy of the duplicate Bill of Entry. The Tribunal upheld the penalty but noted that the issue of interest on this irregularly availed credit was already remanded for re-examination in the assessee's appeal. Conclusion: The Tribunal allowed the appeal by the assessee, remanding the matter to the Adjudicating Authority for re-examination. The Revenue's appeal was dismissed, confirming that interest is not payable on unutilized reversed credit. The penalty for irregularly availed credit based on a photocopy was upheld, but the issue of interest on this amount was remanded for further examination.
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