2024 (12) TMI 597 - AT - Central Excise

Rectification of mistake application regarding payment of interest on Cenvat credit - error apparent on the face of record or not - HELD THAT - As per facts of the case, the appellant has a prima facie case of time bar, however, since the appellant are not contesting the payment of Cenvat Credit of Rs. 60,15,116/- paid under Rule 6 (3) of Cenvat Credit Rules, 2004, the said payment was mentioned, however it is clear that the entire case was time barred and for this reason only, the entire penalty was also set aside. Once, the demand itself is hit by time bar, consequential interest is also not payable. Therefore, the submission of Learned Counsel agreed to the extent this Tribunal has demanded the interest on the payment of Cenvat Credit of Rs. 60,15,116/- the order bears an error apparent on record which needs to be rectified. The appellant is not liable for payment of interest on the amount of Cenvat Credit of Rs. 60,15,116/-. Accordingly, demand of interest is set aside - ROM application is allowed.

Summary

Issues:
Rectification of mistake application regarding payment of interest on Cenvat credit.

Analysis:
The appellant submitted a rectification of mistake (ROM) application seeking to set aside the penalty and interest imposed in an earlier order dated 08.02.2024. The appellant argued that the Tribunal had acknowledged their bona fide intentions and found no suppression of facts, leading to the setting aside of the penalty. However, the appellant contended that since the entire demand was time-barred, interest should not be chargeable. The appellant relied on a Supreme Court judgment to support their argument that the issue of time bar could be considered in a rectification application. On the other hand, the Revenue supported the original order, emphasizing that the Tribunal had consciously ordered the payment of interest, indicating no error on record.

Upon careful consideration of the submissions, the Tribunal examined the earlier order's findings in para 4. The Tribunal noted that despite the prima facie time bar on the demand, the appellant had paid a proportionate credit and was only contesting the penalty. The Tribunal observed that there was no suppression of facts as the department was aware of the relevant information. Consequently, the Tribunal upheld the demand to the extent of the credit paid by the appellant but set aside the penalty. The Tribunal also mentioned that since the entire case was time-barred, no consequential interest should be payable. The Tribunal agreed with the appellant's argument that demanding interest on the Cenvat credit payment was an error apparent on record, warranting rectification.

As a result of the analysis, the Tribunal held that the appellant was not liable to pay interest on the Cenvat credit amount. Therefore, the demand for interest was set aside, and the order dated 08.02.2024 was rectified accordingly. The ROM application was allowed, and the decision was pronounced in open court on 10.12.2024.