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TMI BlogEligiblity of Penalty on Volunteer Service Tax Credit ReversalX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts: We are manufacturer of exciseble goods. We have taken Service Tax credit on our Input services consumed in manufacturing process. after some days we knews that in internal audit some credit are inadmisible we reversed without utilisation,, after in Audit EA2000 it has pointed out Auditor raise the query to pay the penalty on reversal amount, Please advice if is there any relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d case laws.. - Reply By KASTURI SETHI - The Reply = Credit taken and reversed amounts to credit not taken. There are case laws. Since you did not use the same ( Having sufficient balance of credit more than that of amount involved), no interest is chargeable and no penalty is impossible. Case law will be posted today. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Once CENVAT credit is reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsed on pointing out audit interest is also liable to pay by you. If CENVAT credit is reversed and interest is also paid no show cause notice is to be issued. One no SCN is issued no penalty can be imposed. This is my view. - Reply By Bhausaheb Gole - The Reply = As per my view there is no required to pay the interest on reversal amount, if it is sufficient balance of credit available in our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books. - Reply By Bhausaheb Gole - The Reply = Dear Experts: Please give the reference case laws. - Reply By KASTURI SETHI - The Reply = 2017 (347) E.L.T. 112 (Tri. - Bang.) = 2016 (8) TMI 387 - CESTAT BANGALORE CRANES STRUCTURAL ENGINEERS Versus COMMR. OF C. EX., BANGALORE-I - Reply By KASTURI SETHI - The Reply = Dear Querist, The above case law posted by me is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant for you. It was relevant for some other query. It was wrongly posted. Sorry for that. I am posting Board's Circular and two judgements of the Supreme Court on this very issue. These are as under:- T extiles and Textile Articles - Reversal of input credit before utilisation amounts to not taking credit for benefit of Notification No. 30/2004-C.E. Circular No. 858/16/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-CX, dated 8-11-2007 2007 (215) E.L.T. 3 (S.C.) = 2007 (8) TMI 2 - Supreme Court COMMISSIONER OF C. EX., MUMBAI-I Versus BOMBAY DYEING MFG. CO. LTD. 2011 (265) E.L.T. 3 (S.C.) = 2011 (2) TMI 6 - Supreme Court UNION OF INDIA Versus IND-SWIFT LABORATORIES LTD. - Reply By Bhausaheb Gole - The Reply = Thank you for your valuable feedback.. - Reply By KASTU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RI SETHI - The Reply = Welcome pl. Under the auspices of TMI, experts' mission is to satisfy querists and save them from unnecessary litigation. Correct reply on this forum also saves visitors of this forum from rigours of litigation. Needless to say such number of visitors is not limited. Credit goes to TMI for creating such forum for the welfare of trade and industry. - Reply By Gorantla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhaskar Rao - The Reply = Dear Sethi Ji, I am regularly following your replies and found to be apt and relevant to the points raised by the querists. It enriches the knowledge of persons like me. You are doing a great service to trade fraternity and other readers. Thank u sir. - Reply By Himansu Sha - The Reply = When there is sufficient balance, there will be interest. Rule 14 has speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fically mentyioned this. The phase ' availedf oir utiliused' has been replaced by ' availed and utilised'. The decision of the Hon'ble Apex Court in the case of Ind swift ltd. Was based upon the provisions of law prior to amendment. Earlier in the case of Hindustan zinc it was pronounced that no interest is payable when the credit is not utilised. The rule has become clear w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the amendments. No interest is payable if credit is not utilised. - Reply By Himansu Sha - The Reply = But rule 15 has not been amended. The word 'or' has not been replaced. Hence penalty will be imposed for wrong availment of credit even if there is no utilisation. The decision of Ind fab has vindicated the department stand - Reply By Himansu Sha - The Reply = An amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to my reply. In the first line it should be no interest. - Reply By KASTURI SETHI - The Reply = When we say credit reversed amounts to credit not taken, neither Rule 14 nor Rule 15 of Cenvat Credit Rules, 2004 comes into play. Regarding the literal meaning, there is no difference between 'credit taken: and 'credit availed'. Hence neither penalty nor interest is recoverable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 15 will be invoked only if Rule 14 comes into play. - Reply By Ganeshan Kalyani - The Reply = I too would like to thank TMI for having created such a wonderful platform. It brings all the likeminded together. Initially i was a querist in this forum and gradually attempted to post replies. Wherever there was any mistake in my reply, Sri Kasturi Sir would highlight it via personal message ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thanks to TMI because of which i came across such an expert. Also i have high regards to Sri Rajagopalan Sir, Sri Mariappan Sir, Sri Sanjay Sir, Sri Akash Deep Ji, Sri Mahir S Ji and collegue experts. I pray that all these experts and those who were active in long past should start participating in the forum and share their knowledge by resolving the queries of the querist and enrich know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledge of the onlookers. - Reply By Bhausaheb Gole - The Reply = Really it's a very big platform for us to resolve the queries. Thanks to all experts. - Reply By KASTURI SETHI - The Reply = Dear Sh.Bhaskar Rao Ji,. Thanks a lot for your compliments. Such feedback give us satisfaction and boosts our moral to go ahead. - Eligiblity of Penalty on Volunteer Service Tax Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reversal - Query Started By: - Bhausaheb Gole Dated:- 6-4-2017 Service Tax - Got 16 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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