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TMI Blog2017 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... d input services consumed in the manufacturing and clearance of the exempted final products along with interest at the rate of 13% - In the case in hand the appellant has already discharged the interest at the rate of 13% on the common inputs and input services attributable to the exempted goods. In view of this, the impugned order of the adjudicating authority seeking interest at the rate of 24% is unsustainable and liable to be set aside. Penalty - Held that: - there is no reason to visit the appellant with such a penalty under Rule 15(2) of the Cenvat Credit Rules 2004 inasmuch as, it is on record that the appellant has reversed the entire amount of service tax liability with interest prior to the date on which he is supposed to do s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re required to follow the provisions of Rule 6(3) which lays down and was to be followed in the event of non-maintenance of separate accounts. It is the case of the Revenue in the show-cause notice that having not maintained separate accounts, appellant is required to reverse the cenvat credit attributable to the inputs used in or in relation to the manufacture of exempted goods in accordance with the procedure laid down in the said Rule 6(3A)(b) of the Cenvat Credit Rules. It was not done so and during the course of audit, when it was pointed out, the appellant reversed the such credit availed by them along with interest at the rate of 13% per annum on the said excess credit during 01.04.2007 to 28.02.2009. The show-cause notice alleges th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with interest applicable as per the provisions of Section 11BB were discharged by them to the authorities before 30.06.2009. It is his submission that the findings of the adjudicating authority as regards interest liability for the period 01.04.2008 to 28.02.2009 is erroneous, is challenged also on the ground that rate of 24% of interest was provided of the reversal made in compliance of the retrospective amendment made by the Government of India. He would submit that no penalty could be imposed as the issue was regarding the interpretation of the reversal of the cenvat credit under Rule 6(3) of the Cenvat Credit Rules, 2004. 4. Learned Departmental Representative reiterated the findings of the lower authorities. 5. On caref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based upon Clause (h) (i) of the Cenvat Credit Rules 2004 which I reproduce herein below: (h) where the amount equivalent to cenvat credit attributable to provisionally, as prescribed in condition (b), due to reasons that no dutiable goods were manufactured and no taxable service was provided in the preceding financial year, then the manufacturer of goods or the provider of output service is not required to determine and pay such amount provisionally for each month, but shall determine the cenvat credit attributable to exempted goods or exempted services for the whole year as prescribed in condition (c) and pay the amount so calculated on or before 30th June of the succeeding financial year. (i) where the amount determined u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility with interest prior to the date on which he is supposed to do so i.e. 30th June 2009. In my view, this is a fit case wherein the original authorities should not have imposed any penalties as again the issue is regarding interpretation of the provisions of Rule 6(3) of the Cenvat Credit Rules 2004. In view of the foregoing, I hold that the penalty imposed by the lower authorities on the appellant is unwarranted and is liable to be set aside and I do so. 6. In view of the foregoing, in the facts and circumstances of this case, I hold that the impugned order is unsustainable and liable to be set aside and I do so. The impugned order is set aside and the appeal is allowed. (Operative portion of the Order was pronounced in open Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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