9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 1244 - AT - Service TaxCENVAT credit subsequently reversed - Since they were claiming the duty draw back of export of cotton fabric, the department was of the view that the appellant was liable to pay interest on such Cenvat credit from the period such credit was taken till the date on which such credit was reversed - Held that - the decision of Apex Court in the case of Union of India vs. M/s. Ind-Swift Laboratories Ltd. 2011 (2) TMI 6 - Supreme Court , relied upon in which the Hon ble Supreme Court has held that the interest is liable to be paid even if such credit is reversed without utilization - there is no justification for demand of interest - appeal allowed - decided in favor of appellant.
Issues:
- Liability to pay interest on reversed Cenvat credit availed by the appellant. Analysis: The appeal was filed against an Order in original where the appellant, engaged in manufacturing woven fabrics, had availed Cenvat credit amounting to ?17.92 lakh on various services during 2006-07 to 2007-08. Subsequently, the entire Cenvat credit was reversed as the appellant was claiming duty drawback on export of cotton fabric. The department demanded interest on the reversed Cenvat credit from the date it was taken until the date it was reversed. The appellant contended that the availed credit was never utilized and was reversed due to being an exporter claiming drawback. The appellant cited various judgments to support their argument, including cases like CCE vs. Strategic Engineering, Gurmehar Constructions vs. CCE, and CCE vs. Bill Forge Pvt. Ltd. The appellant argued that interest should not be charged on the reversed credit. The Tribunal examined the case laws cited by the appellant and the decision of the Apex Court in Union of India vs. M/s. Ind-Swift Laboratories Ltd. The Tribunal noted the observation of the Hon'ble High Court of Karnataka in the case of Bill Forge Ltd., which emphasized that interest is payable only if the benefit of the credit was actually taken and not reversed promptly upon realization of the mistake. The Tribunal concluded that since the appellant did not utilize the credit and promptly reversed the entry upon realizing the mistake, there was no justification for demanding interest. Therefore, the impugned order was set aside, and the appeal was allowed.
|
