2017 (5) TMI 814 - AT - Central Excise

Liability of interest - CENVAT credit availed wrongly was reversed - Held that - In the present appeals there is no clear finding of non-utilisation of the credit availed during the passage of time - There is no clarity on the facts of the case in the present appeals and therefore, the said appeals cannot be decided merely on the basis of the case laws as cited by both the sides - the appeals are allowed by way of remand to the Adjudicating Authority to decide afresh - appeal allowed by way of remand.

Summary

Issues Involved:
Common issues involving the wrongful availing and reversal of credit leading to the demand of interest in various appeals.

Analysis:
1. Legal Precedents and Arguments:
The advocates for the appellants argued that the credit was wrongly availed and subsequently reversed, making the demand for interest unsustainable. They cited previous decisions by the Tribunal, High Court, and Supreme Court to support their contention that interest cannot be demanded on credit that was taken but not utilized. On the contrary, the Revenue's representative referred to a Supreme Court decision and a Tribunal's Larger Bench decision, asserting that the demand of interest is valid even if the credit was not utilized.

2. Factual Examination:
The case facts of each appeal were considered individually. For instance, in the case of M/s. Indessa Gases Pvt. Ltd., the Commissioner (Appeals) agreed that penalty was not payable on the reversed amount before utilization but upheld the interest. In another case, M/s. Utkarsh Galva Ltd., it was noted that the appellant availed credit based on photocopies, indicating intent. The decision in M/s. Amrit Exports Pvt. Ltd. was influenced by the non-mention of a relevant circular, leading to the requirement of paying interest. Similarly, other appellants like Berger Paints India Ltd. and National Aluminium Company Ltd. faced issues related to irregularly availed credit and utilization.

3. Judgment and Remand:
Upon review, the Member (Judicial) found discrepancies in the Commissioner (Appeals)'s findings regarding the utilization of irregular credit. It was observed that some appellants had taken irregular credit for an extended period before reversing it. Due to the lack of clarity on credit utilization, the applicability of case laws depended on individual case facts. Consequently, all appeals were remanded to the Adjudicating Authority for detailed examination of facts and subsequent application of relevant case laws. Both parties were granted the opportunity to present evidence during the fresh adjudication process.

In conclusion, the judgment allowed all appeals by way of remand, emphasizing the need for a thorough examination of facts and adherence to applicable case laws in determining the demand for interest on wrongly availed credit.