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2013 (2) TMI 313 - AT - Central ExciseInterest u/s 11AB Delay in reversal of Cenvat Credit Input clear as such - Assessee manufacture excisable goods during the period March 2001 to August 2001 Cenvat Credit reverse on 5.10.2001 Held that - The assessee s ground that they are not required to reverse the Cenvat credit at all is not acceptable at this stage as they have not challenged the confirmation of demand of credit involved before proper forum by way of appeal. Following the decision in case of SKF India Ltd. (2009 (7) TMI 6 - SUPREME COURT) that for delayed payment interest is payable. As the provisions of Section 11AB for payment of interest came on 11.5.2001, therefore on delayed reversal of credit the respondents are liable to pay interest for the period from 12.5.2001 to 5.10.2001. Partly in favour of revenue
Issues: Appeal against dropping of interest demand by Commissioner (Appeals) based on delayed reversal of Cenvat Credit.
Analysis: 1. Issue of Interest Demand: The appellant, a manufacturer of excisable goods, cleared input as such and later reversed the Cenvat Credit availed on the input. The demand for interest was raised due to the delayed reversal of the credit. The Commissioner (Appeals) dropped the interest demand based on a Tribunal decision. The Revenue appealed against this decision. 2. Contentions of the Parties: The Revenue argued that the Tribunal decision was reversed by the High Court, and as the liability was admitted, interest should be paid on the delayed reversal. On the other hand, the respondent contended that they were not required to reverse the credit based on a different Tribunal decision, and they reversed the credit under protest. 3. Judicial Analysis: The Tribunal found the respondent's argument of not being required to reverse the credit unacceptable as they did not challenge the confirmation of the credit demand. Referring to a Supreme Court judgment, the Tribunal held that interest is payable for delayed payment as per Section 11AB. Therefore, the respondents were directed to pay interest for the period from 12.5.2001 to 5.10.2001. 4. Conclusion: The appeal was disposed of with the direction for the respondents to pay interest within 30 days from the date of the order. The judgment upheld the principle that interest is payable for delayed payment as per legal provisions, emphasizing the importance of complying with such requirements in excise matters.
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