2019 (4) TMI 893 - AT - Central Excise

Imposition of Interest and penalty - non-utilization of wrongly availed CENVAT credit - appellant had throughout sufficient balance in their CENVAT credit account - Held that - The issue is no more res integra and has been settled in favour of the assessee by the Karnataka High Court in the case of Bill Forge Ltd. 2011 (4) TMI 969 - KARNATAKA HIGH COURT , where it was held that once the entry was reversed, it is as if that the Cenvat credit was not available - appeal allowed - decided in favor of appellant.

Summary

Issues: Appeal against rejection of CENVAT credit availed on the basis of invalid input documents - Recovery of irregularly availed credit - Denial of credit under CENVAT Credit Rules - Imposition of interest and penalty - Appellant's challenge to the impugned order.

Analysis:
1. Recovery of Irregularly Availed Credit: The appellant, engaged in filter manufacturing, availed CENVAT credit based on invalid input documents. A show-cause notice was issued to recover irregularly availed credit for a specific period. The Additional Commissioner denied the credit, confirmed the demand, and imposed a penalty under relevant provisions. The matter was remanded back to re-examine certain aspects, resulting in a partial reduction of the demand. The appellant paid the reduced amount and contended they were not liable for interest and penalty due to a sufficient balance in their CENVAT credit account.

2. Appellant's Arguments: The appellant challenged the impugned order, arguing it was unsustainable as it failed to appreciate the facts and law properly. They emphasized timely payment of the reduced amount and asserted their lack of liability for interest and penalty. The appellant cited various decisions in support of their position, highlighting precedents where similar issues were decided in favor of the assessee.

3. Judgment: After hearing both parties and examining the records, the Judicial Member considered the issue settled in favor of the assessee by a precedent set by the Karnataka High Court in the case of Bill Forge Ltd. Consequently, the appeal was allowed, and the impugned order was set aside. The judgment was pronounced in open court on a specific date.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by the parties, and the ultimate decision rendered by the Judicial Member based on legal precedents and considerations.