2018 (4) TMI 67 - AT - Central Excise

Demand of interest - CENVAT credit on supplies made under International Competitive Bidding (ICB) - reverse charge mechanism - whether interest is payable on the amount of cenvat credit of ₹ 71,41,940/- which was wrongly availed in the year March 2010, but reversed pursuant to being pointed on investigation by the department on 12th July, 201? - Held that - interest cannot be recovered when the time barred demand has been paid voluntarily. In the present case, no such findings has been recorded by the Adjudicating Authority i.e., whether the amount paid by the appellant can be confirmed by invoking the extended period or otherwise. Therefore, to ascertain the said fact, the matter need to be remanded to adjudicating Authority. Appeal allowed by way of remand.

Summary

Issues:
1. Whether interest is payable on the wrongly availed cenvat credit.

Analysis:

Issue 1: Whether interest is payable on the wrongly availed cenvat credit.

The case involved an appeal against an order passed by the Commissioner of Central Excise, Customs, and Service Tax concerning the reversal of cenvat credit amounting to ?71,41,940. The appellant contended that they voluntarily reversed the credit without any demand and, therefore, interest and penalty imposition were unjustified. The appellant argued that the provision of Rule 6 of CCR, 2004 did not apply to goods supplied under International Competitive Bidding (ICB). The Revenue, on the other hand, claimed that the credit was wrongly availed, and interest was payable on the reversed amount. The Revenue highlighted the provision of Sec. 11A(2B) of CEA, 1944, which mandates interest payment on short-paid amounts. The Tribunal found that the matter needed to be remanded to the adjudicating authority for a fresh decision as the findings regarding the confirmation of the amount paid and the applicability of the extended period were not clearly addressed in the initial order. The Tribunal set aside the impugned order and allowed the appeal by way of remand, emphasizing the need for a proper determination based on established legal principles after providing the appellant with a hearing opportunity.

This detailed analysis of the issues and arguments presented by both parties in the case highlights the complexity of the legal dispute regarding the payment of interest on wrongly availed cenvat credit. The Tribunal's decision to remand the matter for further adjudication underscores the importance of ensuring a fair and thorough examination of the facts and legal principles involved in such cases.