2014 (4) TMI 142 - AT - Central Excise

Availment of CENVAT Credit - Whether the appellant was entitled to take cenvat credit in respect of capital goods which was subjected to depreciation - Held that - Thus adjudicating authority was right to order inadmissibility of cenvat credit of Rs.3,72,349/-. It appears that on being pointed out there was reversal of the said credit in the account of the appellant. Adjudication order does not disclose whether the credit recorded in the books were at any time availed. In absence of any finding in that aspect there shall be neither interest nor penalty chargeable. There is no dispute by the appellant that it had wrongly availed such credit. But there was a reversal done after lapse of more than one year. Such huge period calls for payment of interest to Revenue because in the meantime the appellant must have availed the benefit of credit recorded in the gooks. Accordingly, interest shall be payable on this amount but no penalty be chargeable - Decided partly in favour of assessee.

Summary

Issues:
1. Entitlement to cenvat credit for capital goods subjected to depreciation.
2. Violation of law due to non-payment of a specific amount.
3. Inadmissibility of cenvat credit and reversal after a significant period.

Analysis:
1. The first issue revolves around the entitlement of the appellant to take cenvat credit for capital goods subjected to depreciation. The judgment clarifies that the appellant was not entitled to such credit as per the Cenvat Credit Rules 2002. The adjudicating authority correctly ordered the inadmissibility of cenvat credit amounting to Rs.3,72,349. It is noted that there was a reversal of the credit in the appellant's account, but it remains unclear whether the credit was actually availed, leading to the conclusion that no interest or penalty is chargeable in this regard.

2. Moving on to the second issue, it concerns the violation of law due to the non-payment of Rs.780 by the appellant. The appellant does not contest the default in payment, which was eventually made after a delay of 9 months. The judgment highlights that such a situation warrants the payment of interest to compensate the Revenue for the delay in payment.

3. The final issue addresses the inadmissibility of cenvat credit amounting to Rs.9,57,983, which the appellant wrongly availed. Despite the reversal of this credit after more than a year, it is acknowledged that the appellant must have benefitted from the credit during this period. Consequently, the judgment rules that interest shall be payable on this amount, while no penalty is chargeable in this instance.

In conclusion, the appeal is allowed to the extent indicated above, with the judgment providing a detailed analysis of each issue and the corresponding rulings.