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TMI Blog2016 (12) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... he credit of duty paid on capital goods, we remand the matter back to the original authority to ascertain availability of credit on due dates for each month after reversal after disallowing the credit not reversed on capital goods transferred. The adjudicating authority is directed to arrive at a finding of the interest liability by a strict application of rule 14 in relation to credit erroneously taken and section 75 of Finance Act, 1994 in the event of deficit of credit on the date on which tax liability was to be discharged - appeal disposed off by way of remand. - APPEAL NO: ST/44 & 64/2012 - ORDER NO:A/93125-93126/16/STB - Dated:- 13-10-2016 - Shri M V Ravindran, Member (Judicial) And Shri C J Mathew, Member (Technical) Shri Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility on this short-payment was computed at ₹ 27,43,686/-. Further, the assessee had failed to reverse CENVAT credit of ₹ 53,85,476/- when transferring capital goods to other circles and this was made good by them vide challan dated 26th March 2008. Interest liability of ₹ 5,16,731/- was held to be due. 3. The assessee had failed to make debit entries in the CENVAT credit account towards discharge of tax liability on the due date. Though, as on date of scrutiny, there was no outstanding amount, the interest liability of ₹ 1,73,02,813/- was held as due in the impugned order. 4. The assessee is aggrieved by the levy of interest and penalties as the errors pointed out were claimed to be on account of clerical mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax, Ahmedabad [2011 (21) STR 455 (Tri-Ahmd)]. 5. Learned Counsel for the appellant made the further submission that the alleged delay in payment of tax by debit of CENVAT credit was no delay at all. It was contended that credit was ever available owing to the tax paid on inputs and input services - in effect, a temporary transfer of the amount to the government - and that debit entries are merely scriptory and, hence, tax liability had been discharged. It was further argued that the credit could not have been utilized for any other business activity or for discharge of some other liability. It was also alleged that the tax authorities had not ascertained the availability of credit on the dates on which the tax was due to be paid and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the original authority directing the assessee to pay the interest or not. 11. In the case before the Punjab and Haryana High Court which has been reversed by the Apex Court the issue was as to whether merely by taking the Cenvat credit erroneously and not utilizing it, the provisions of Rule 14 could be invoked or not. While interpreting the said provisions, the Lordships of the Apex Court observed thus in paragraphs 15, 16 and 17: 15. In order to appreciate the findings recorded by the High Court by way of reading down the provision of Rule 14, we deem it appropriate to extract the said Rule at this stage which is as follows: Rule 14. Recovery of Cenvat credit wrongly taken or erroneously refunded. - Where the Cenvat cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no allegation that the credit of duty paid on capital goods was wrongly taken. It would appear that there is no cause to invoke rule 14 of CENVAT Credit Rules, 2004. It is also not alleged that failure to reverse the credit when transferring the goods to another circle was to the detriment of Revenue. Retention of excess credit, albeit erroneously, is not covered by rule 14. At the same time, we note that the amount was made good by cash deposit which raises the question as to whether this unreversed credit was utilised for payment of tax. If that did occur, the claim of no detriment to Revenue will not sustain. However, the aspect needs to be verified. 11. It is seen that short-debit amount was similarly made good by cash depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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