9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 751 - AT - Central ExciseDemand of Interest - time limitation - reversal of irregularly availed CENVAT Credit in respect of Capital Goods - Held that - It has been held by the Hon ble Apex Court in the case of TVS Whirlpool Ltd 1999 (10) TMI 701 - SUPREME COURT OF INDIA that the demand of interest has to be made within the normal period of limitation or 5 years as the case may be, as is applicable to the demand of duty itself - In this case, there is no allegation or evidence that there was any fraud, collusion, wilful misstatement or suppression of facts with an intention to evade payment of interest on the CENVAT credit. Therefore, the demand of interest should have been made within one year and this has not been done within this time limit - no demand can be made for the interest being time barred. Penalty u/r 15(1) of CENVAT Credit Rules, 2004 - Held that - To attract penalty under Rule 15(1) of CENVAT Credit Rules, 2004, the person should have taken or utilized CENVAT Credit wrongly or in contravention of the provisions of the Rule - In this case, prima facie there is no evidence of taking credit wrongly by the appellant. It is different matter that the appellant has not disputed and has reversed the credit and is also not contesting reversal of CENVAT credit done by them voluntarily - this is not a case fit for imposition of penalty under Rule 15(1) of CENVAT Credit Rules, 2004. The impugned order is modified to the extent that the interest of the period beyond one year from the show cause notice is set aside and the demand of interest within one year is confirmed and the penalty under Rule 15(1) is set aside - appeal allowed in part.
Issues:
1. Demand of CENVAT credit reversal on capital goods availed by the appellant. 2. Imposition of interest on the reversed CENVAT credit. 3. Imposition of penalty under Rule 15(1) of CENVAT Credit Rules, 2004. Analysis: Issue 1: Demand of CENVAT credit reversal on capital goods availed by the appellant The appellant, engaged in manufacturing crank cases, availed CENVAT credit on capital goods consigned to M/s Ashok Leyland Ltd but used by the appellant for job work. The appellant reversed the credit after being informed of the irregularity. The adjudicating authority confirmed the demand under Rule 14 of CENVAT Credit Rules, 2004. The appellant argued that they were entitled to credit as they used the goods, even though consigned to another entity. The Tribunal found that the appellant did not contest the amount taken and reversed, focusing on whether credit could be taken based on the consignee's name. The Tribunal held that the appellant was entitled to take credit based on utilization, not just the consignee's name, especially in job work scenarios. Therefore, the demand for credit reversal was upheld. Issue 2: Imposition of interest on the reversed CENVAT credit The appellant contested the imposition of interest beyond one year from the show cause notice, citing the TVS Whirlpool Ltd case setting a time limit for interest demands. The Tribunal agreed that interest demands must adhere to the limitation period. Since there was no evidence of fraud or intention to evade payment, the demand for interest beyond one year was time-barred. The demand within one year was confirmed, aligning with the TVS Whirlpool Ltd judgment. Issue 3: Imposition of penalty under Rule 15(1) of CENVAT Credit Rules, 2004 The appellant argued against the penalty, stating they had no intention to misuse the credit and promptly reversed it. The department contended that the penalty was mandatory under Rule 15(1) regardless of credit reversal. The Tribunal analyzed the rule and found that to attract penalty, the credit must have been wrongly utilized. Since the appellant used the goods as a job worker for the consignee, the utilization was valid. The Tribunal concluded that there was no evidence of wrongful credit usage, leading to the setting aside of the penalty under Rule 15(1). In conclusion, the Tribunal modified the order by setting aside interest demands beyond one year, confirming interest within one year, and setting aside the penalty under Rule 15(1). The appeal was disposed of accordingly.
|
