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TMI Blog2018 (7) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... be any mis-statement, fraud or collusion on the part of the Respondent Assessee through which it wanted to evade the Excise Duty in question - the setting aside of the interest and penalty in these circumstances cannot be faulted. Appeal dismissed - decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of ₹ 8,935/- (Rupees Eight Thousand Nine Hundred and Thirty Five only) towards interest. Thereafter a show-cause notice was issued to the appellant under Section 11AC for imposing the penalty. The Joint Commissioner vide Order-in-Original dated 31.07.2008 held the view that there was suppression with a view to evade duty and imposed equal penalty of ₹ 19,25,916/- (Rupees Nineteen Lakhs Twenty Five Thousand Nine Hundred and Sixteen only) under Section 11AC besides demanding the differential interest of ₹ 1,22,371/- (Rupees One Lakh Twenty Two Thousand Three Hundred and Seventy One only). Aggrieved by the said order, the appellant preferred an appeal before the Commissioner who vide his order dated 18.02.2009 confirmed the Joint Commissioner's order while dismissing the appeal of the appellant. Hence the present appeal. 2. Heard both the parties and perused the records. 3. Learned counsel for the appellant has submitted that the impugned order is wrong and illegal and has been passed without considering the judgments passed by the Tribunal and the High Court. He further submitted that on account of the inadvertent mistake on the part of the person looking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Larger Bench in the case of JK Tyres & Industries Ltd. Vs. ACCE cited supra. It is a fact that the appellant has reversed the credit before utilization of the same and a small portion of the cenvat credit was utilized but the same was reversed along with interest before the issue of show-cause notice and in view of the judgment of this Tribunal in the case of Kumar Organics Product Ltd. Vs. CCE, Bangalore 2014 (307) ELT 774 (Tri.-Bang.) the appellant is not liable to pay interest as well as penalty. By following the ratio of the decisions cited supra, I am of the considered opinion that the impugned order is not sustainable in law and therefore I set aside the same by allowing the appeal of the appellant with consequential relief, if any." 4. The learned counsel for the Revenue, Mr. Amit Deshpande has urged before us that since the Respondent Assessee admitted the mistake of Cenvat Credit availed with respect to Basic Customs Duty and Cess on Textiles and it is only when the said mistake was pointed out by the Officer of the Department who visited the Business place of the Assessee, the said entry was reversed by the Respondent Assessee, therefore the learned Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny time thereafter when making payment of excise duty on the excisable product. It matures when the excisable product is received from the factory and the stage for payment of excise duty is reached. Actually, the credit is taken, at the time of the removal of the excisable product. It is in the nature of a set off or an adjustment. The assessee uses the credit to make payment of excise duty on excisable product. Instead of paying excise duty, the cenvat credit is utilized, thereby it is adjusted or set off against the duty payable and a debit entry is made in the register. Therefore, this is a procedure whereby the manufacturers can utilise the credit to make payment of duty to discharge his liability. Before utilization of such credit, the entry has been reversed, it amounts to not taking credit. Reversal of cenvat credit amounts to non- taking or credit on the inputs. 21. Interest is compensatory in character, and is imposed on an assessee, who has withheld payment of any tax, as and when it is due and payable. The levy of interest is on the actual amount which is withheld and the extent of delay in paying tax on the due date. If there is no liability to pay tax, there is no l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther words by taking such credit, if he had not paid the duty which is legally due to the Government, the Government would have sustained loss to that extent. Then the liability to pay interest from the date the amount became due arises under Section 11AB, in order to compensate the Government which was deprived of the duty on the date it became due. Without the liability to pay duty, the liability to pay interest would not arise. The liability to pay interest would arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise." 8. The imposition of penalty and interest in the present case has been set aside by the learned Tribunal essentially on the ground that soon upon the mistake being pointed out by the Officer of the Department, the Respondent Assessee immediately reversed the Cenvat Credit wrongly availed by it in respect of the Basic Customs Duty (BCD) and Cess on Textiles. 9. In view of this, there cannot be said to be any mis-statement, fraud or collusion on the part of the Respondent Assessee through which it wanted to evade the Excise Duty in question. Therefore, the setting aside of the interest and penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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