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2018 (2) TMI 137 - AT - Central ExciseLiability of interest - wrong availment of CENVAT credit - Held that - the appellant had reversed the irregular cenvat credit taken by them on being pointed out by the Revenue - also, the cenvat credit was reversed before the issuance of show cause notice - the appellant is liable to pay interest for irregular availment of cenvat credit in view of the judgment of Hon ble Bombay High Court in the case of GL&V India 2015 (5) TMI 375 - BOMBAY HIGH COURT - demand of interest upheld. Extended period of limitation - penalty - Held that - though the Revenue has invoked the extended period of limitation, but they have not been able to bring on record any material which shows that there was suppression of fact or fraud or collusion or willful misstatement with intent to evade payment of tax - also, the wrongly availed credit was reversed before the issue of show cause notice, therefore there is no intent to evade - extended period and penalty not invocable. Appeal allowed in part.
Issues:
Appeal against disallowed cenvat credit, interest, and penalty under Cenvat Credit Rules, 2004. Analysis: 1. The appellant availed cenvat credit on structural materials used for civil construction and conveyor system. The Commissioner disallowed the credit, imposed interest, and penalty. 2. The appellant argued that they did not utilize the credit for tax payment, had sufficient balance, and reversed it voluntarily before the show cause notice. Cited precedents to support no liability for interest or penalty. 3. The Revenue contended that the appellant wrongly took credit and reversed it only after being pointed out. Rejected the appellant's arguments citing relevant case laws. 4. The Tribunal found the appellant reversed the credit voluntarily before the notice, making them liable for interest. Rejected the penalty due to lack of intent to evade taxes, following precedents. 5. The Tribunal distinguished the Karnataka High Court judgment and upheld the interest liability based on the Bombay High Court's decision. Dropped the penalty due to lack of intent to evade taxes. 6. The appeal was partly allowed, upholding the interest liability and dropping the penalty. The decision was pronounced on January 31, 2018.
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