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TMI Blog2015 (5) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as 'AND' by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "OR" in between the expressions 'taken' or 'utilized wrongly' or has been erroneously refunded' as the word "AND". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest - Tribunal was of the view that in view of the judgment of the Punjab and Haryana High Court the Appeal deserves to be allowed on the short ground and as such, has not gone into other aspects of the matter. We find that it will be approp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the demand; (iii) interest amounting to ₹ 66,945/- should not be charged and recovered under the provisions of Rule 14 of the Cenvat Credit Rules, 2004. Hereto annexed and marked Exhibit A is the copy of the Show Cause Notice dated 03.02.2009. 4. The show cause notice was adjudicated by the Additional Commissioner, Central Excise, Pune by order dated 21st August, 2009 by which the Additional Commissioner confirmed the demand and held that the suo motu credit of ₹ 5,35,500/- was wrongly availed by the assessee. By the said order the amount which was debited by the assessee on 31st December, 2008 was appropriated towards the demand made. The Additional Commissioner also directed the recovery of interest amounting to ₹ 66,945/-. Being aggrieved thereby an appeal was preferred before the Commissioner (Appeals), Central Excise, Pune who by order dated 31st December, 2009 dismissed the appeal and confirmed the order passed by the original authority. Being further aggrieved thereby, an appeal was preferred before the learned CESTAT. The learned CESTAT vide order dated 21st July, 2010 relying on the judgment of the Punjab and Haryana High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the event there is determination under sub section (2) of Section 11A to make the payment. The learned senior counsel submits that in the present case, there is no question of payment. The case is only of disallowing the Cenvat credit and appropriating the debit made by the assessee. 7. Mr. Sridharan, learned senior counsel appearing for the Respondent made an attempt to distinguish the judgment of the Apex Court in the case of Union of India v. Ind-Swift Laboratories Ltd. reported in 2011 (265) ELT 3 (S.C.) The learned senior counsel submits that in the said case the case was of an illegal taking of the credit, whereas in the present case, there is no issue as to whether the assessee has illegally taken the credit or not. The learned senior counsel submits that though the credit has been legally taken and also utilized in a legal manner, the authorities on an erroneous reading of the rules have held that the credit was erroneously utilized. The learned senior counsel also relies on a Division Bench judgment of the Karnataka High Court in the case of Commissioner of C. Ex. S.T., LTU, Bangalore v. Bill Forge Pvt. Ltd. reported in 2012 (279) ELT 209 (Kar) and the Madras High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The High Court proceeded by reading it down to mean that where CENVAT credit has been taken and utilized wrongly, interest should be payable from the date the CENVAT credit has been utilized wrongly for according to the High Court interest cannot be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. Therefore, High Court on a conjoint reading of Section 11AB of the Act and Rules 3 4 of the Credit Rules proceeded to hold that interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eous availment of the Cenvat credit, the assessee accepted the mistake and immediately reversed the entry. In the present case, the reversal of the entry is after a period of ten months. In that view of the matter, we find that even on facts, the said judgment is distinguishable. 16. In so far as the judgment passed by the Madras High Court is concerned, the Madras High Court has taken a view that mere taking of Cenvat credit facility is not at all sufficient for compelling the assessee to pay interest as well as penalty. With great respect to the Hon'ble Judges of the Madras High Court, we may say that this is not what has been held by their Lordships of the Apex Court. The Apex Court has in clear terms held that the interpretation as placed by the Punjab and Haryana Court for invoking the provisions of Rule 14, there has to be taking as well as utilizing is not correct in law. The Apex Court has held that such an interpretation is totally impermissible. In that view of the matter, the said judgment would be of no assistance to the case of the assessee. 17. In the result, we hold that the view taken by the learned Tribunal is not sustainable in law. 18. The question o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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