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TMI Blog2013 (12) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... s highly unsatisfactory. Accordingly, the COD application is dismissed. Consequently, the Cross Objection also stands dismissed. 3. The facts relevant to the case are as follows:- The respondent, M/s Kay Bouvet Engineering Pvt. Ltd. took CENVAT Credit of CVD amounting to Rs. 30,56,260/- in respect of goods imported vide Bill of Entry No. 00478 dated 9.7.2001 without receipt of the goods in their factory. However, in the Gate Register maintained at the factory, entries were made showing the receipt of the goods on 30.6.2001. The goods were imported on 20.7.2001 and the consignment left Mumbai on 21.7.2001 to their customer M/s. Dhanlaxmi SSK Niyamit, Belgaum as per the container transport consignment note dated 21.7.2001. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of penalty was imposed on the respondent under Rule 13(2) of the Cenvat Credit Rules, 2001 read with Section 11AC of the Central Excise Act. The respondent preferred an appeal before the lower appellate authority, who vide the impugned order held that inasmuch as the entire credit has been reversed before issuance of the show-cause notice, interest under Section 11AB and penalty under Section 11AC are not sustainable and accordingly, he set aside the same. Aggrieved of the same, the Revenue is before us. 4. In the appeal filed by the Revenue, it has been urged that in the present case, the respondent had resorted to fraud by taking credit without receipt of the goods into the factory and also by manipulating the private records such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Commissioner of Central Excise, Delhi-III vs. Machino Montell (I) Ltd. - 2006 (202) ELT 398 (P&H), wherein it has held that mere discharge of duty liability prior to issue of show-cause notice would not lead to non-imposition of interest and penal liabilities if such action was on account of fraud, collusion or any willful mis-statement or suppression of facts with an intent to evade payment of duty. He further relies on the decision of Hon'ble Apex Court in the case of Ind-Swift Laboratories Ltd. -2011 (265) ELT 3 (SC), wherein it has been held that there is no difference between taking of CENVAT Credit or utilization of credit and if credit is taken wrongly, interest liability would attract from the date of takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section ( 1) in respect of the duty so paid: Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year" referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1. - Nothing contained in this sub-section shall apply in a case where the duty was not levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d signatory and the Accountant of the respondent firm clearly evidence the fact that the appellant, knowing fully well that they are not eligible to take the credit, has taken ineligible credit deliberately. If the department had not investigated the matter, this wrong availment of credit would have gone unnoticed. It is only after pointing out by the department, the respondent has reversed the credit that of without paying any interest thereon. The entire conduct of the respondent clearly shows a guilty mind and intent to evade duty by manipulation of books of account and also by taking ineligible credit. Therefore, Explanation to Section 11A(2B) comes to play and hence, the reversal of credit by the respondent would help the case at all a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also not applicable to the facts of the present case. 6.4 As regards the Hon'ble High Court of Karnataka's decision in the case of Bill Forge pvt. Ltd. (supra), the said decision dealt with circumstances where the credit was taken wrongly and the reversal was done during the same month before the liability to pay duty arose. In that context, the Hon'ble High Court held that since the liability to pay duty id not arise, therefore, reversal of credit would not attract interest liability. In the present case, the credit was taken in the month of October and reversal was done in the Month of December. Therefore, the liability to pay duty would have arisen at least for two months. Therefore, the ratio of Hon'ble High Court of Karnataka in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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