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2017 (12) TMI 1082 - AT - Central ExciseCENVAT credit - proportionate Cenvat credit on account of exempted services - liability on interest - Electric Generating Set - Held that - it has not been disputed that the appellant had sufficient balance in their Cenvat register, which amount was subsequently reversed, on being objected by the audit. Further it has been provided by way of amendment vide N/N. 18/2012-CE (NT) dated 17/03/2012 that no interest is chargeable upon subsequent reversal of the credit, if the assessee is able to demonstrate that they had not utilized the credit. The period of dispute in the present appeals is 2011-12 and 2012-13 - under the provisions of the amended Rule 14 of CCR, 2014 the same shall have retrospective effect and under the admitted fact that they have not applied the credit. I hold that they are not liable to pay interest. CENVAT credit - Electric Generating Set - Held that - It is admitted fact that there is no stay granted by the Hon ble Gujarat High Court against the order of the Tribunal. In this view of the matter, I find no merits in the appeal of the revenue. Appeal allowed - decided in favor of appellant-assessee.
Issues:
1. Availment of Cenvat credit on Capital Goods Electric Generating Set 2. Non-reversal of proportionate Cenvat credit on account of exempted services 3. Inadmissible Cenvat credit on services received in relation to export Issue 1: Availment of Cenvat credit on Capital Goods Electric Generating Set The appellant availed Cenvat credit on Capital Goods Electric Generating Set without payment of duty and without registration. The issue was settled, and both parties agreed. The Tribunal found no merit in the revenue's appeal, as there was no stay granted by the Hon'ble Gujarat High Court against the Tribunal's order. The appeal filed by the assessee was allowed, and the revenue's appeal was dismissed. Penalties imposed were set aside, and consequential benefits were granted. Issue 2: Non-reversal of proportionate Cenvat credit on account of exempted services The issue revolved around the non-reversal of Cenvat credit on exempted services. The appellant argued that the credit was reversed more than 18 months before the issue of the show cause notice, rendering the notice invalid. Additionally, the appellant claimed that since they had sufficient Cenvat credit balance and did not utilize the reversed amount, no interest liability arose. The Tribunal held that under the amended Rule 14 of CCR, 2014, no interest is chargeable upon subsequent credit reversal if the credit was not utilized. Consequently, the appellant was not liable to pay interest. The revenue's appeal was based on the Tribunal's order in another case, but the Tribunal found no merit in their argument. Issue 3: Inadmissible Cenvat credit on services received in relation to export The issue of inadmissible Cenvat credit on services related to export was resolved, with both parties agreeing. The Tribunal upheld the admissibility of the Cenvat credit based on the Supplementary Invoice, as the supplier faced no charges of suppression. The Tribunal ruled in favor of the appellant, stating that the credit was permissible under the Cenvat Credit Rules. The revenue's appeal was dismissed, and the penalties imposed were set aside. In conclusion, the Tribunal's judgment addressed the issues of Cenvat credit availment on Capital Goods Electric Generating Set, non-reversal of Cenvat credit on exempted services, and inadmissible Cenvat credit on services related to export. The Tribunal allowed the appellant's appeal, dismissed the revenue's appeal, and set aside imposed penalties, providing consequential benefits to the assessee in accordance with the law.
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