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TMI Blog2019 (6) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... qual amount of penalty under Rule 15 (3) of the Cenvat Credit Rules, 2004 - HELD THAT:- The intention of the appellant have never been to misuse the cenvat credit or evade service tax on account of same and therefore, primarily we feel that since they have already reversed the cenvat credit and have also paid interest, there was no need to issue show cause notice left aside invoking the provisions of Rule 15 (3) of the Cenvat Credit Rules, 2004 for imposition of equal amount of penalty. Penalty u/s 78 - HELD THAT:- The facts in this matter indicate that the appellant on its own reversed back the cenvat credit and has reflected the same in their financial books of accounts. There have also been correspondence between the officers of the Department and the appellant which indicate that the appellants have always having credit in their account much more than what was required to be reversed and if such credit have been reversed on its own by the appellant, it will amount to non-taking of the cenvat credit. Since the original amount of credit was already reversed as the assessee had claimed that they always had credits in accounts much above the required amount, the credits in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to ₹ 50,25,246/- has been demanded as per the provisions of Section 73(1) of Finance Act, 1994 read with Rule 14 of Cenvat Credit Rules, 2004. Interest of ₹ 7,78,260/- has also been demanded invoking the provisions of section 75 of Finance Act, 1994 read with Rule 14 of Cenvat Credit Rules, 2004 3. A penalty of ₹ 50,25,246/- has also been invoked to be imposed under Rule 15(3) of the Cenvat Credit Rules 2004. The matter has been adjudicated by learned Commissioner vide order dated 31.03.2016 whereunder all the charges as invoked in the Show cause notice has been confirmed. 4. The learned adjudicating authority has imposed penalty of ₹ 50,25,246/- by invoking the provisions of Section 78 of Finance Act, 1994 read with Rule 15(3) of Cenvat Credit Rules, 2004. Though we find that the provisions of Section 78 of Finance Act, 1994 have not been invoked in the Show Cause Notice dated 20.03.2013. 5. The learned advocate appearing on behalf of the appellant has submitted that order in original is legally not sustainable in the facts of the matter as well as on the question of law. Learned advocate has submitted that so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to non taking of cenvat credit and it is further been added that the interest will be leviable only if wrongly availed cenvat credit had been utilized by the assessee. 7. The learned advocate has also relied upon several decisions to prove that penalty under Section 78 read with Rule 15 of the Cenvat Credit Rules was not invokable in the given circumstances of the matter. Learned advocate has relied on the judgement of this Tribunal in the case of Spectrum Power general Ltd. vs. CCE Cus ST Hyderabad reported in 2017 (3) GSTL 500 (Tri-Hyderabad) wherein it was held as under: There could be a bona fide error on the appellant s part of not declaring the amount of ₹ 3.05 crores as the commission received in the ST return, but it is also undisputed that the said amount has been declared in the balance sheet as receipts. In our view, this plea of the appellant that there was a bona fide error in not recording the amount in the ST-3 return is seems to be acceptable. In the facts and circumstances of this case, by invoking the provisions of section 80 of Finance Act, 1994, we set aside the penalty imposed by the adjudicating authority under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 (Tri-Mumbai) 4. Escorts Ltd. vs CGST CC CE Dehradun Appeal No. E/51664/2018 SMC dated 08.08.2018 (Tri-Delhi); 5. Grasim Bhiwani Textiles Ltd. vs. CCE, Rohtak [2016 (332) ELT 865 (Tri-Del)]; 6. Rallison Electricals Ltd. vs. CCE, Alwar Apepal No. 51040/2017 dated 30.08.2017 (Tri-Delhi) 10. We have also heard learned Departmental Representative who has reiterated the findings as given in the Order-in-original. 11. Having heard the appellant as well as the Departmental Representative and after perusal of record of the appeal, we feel that it will be relevant to have a relook at the facts of the matter. It is a matter of record that before the Audit party visited the appellant between 27.10.2010 to 02.11.2010, the appellants have already reversed back the cenvat credit amounting to ₹ 50,25,246/- in compliance to the requirement of Rule 6(3) of Cenvat Credit Rules, 2004 and same was reflected in the financial accounts including the balance sheet for financial year 2009-2010. It was only on comparison of balance sheet and the ST 3 returns which have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Finance Act with an intent to evade payment of service tax are not present at all in the case in hand as the appellant themselves have reversed back the cenvat credit which was required to be reversed in compliance to the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 and same has been duly reflected in their financial account including the balance sheet. Thus, the intention of the appellant has never been to misuse the cenvat credit which was not due to them as per the provisions of Cenvat Credit Rules and same has also been reversed back along with the interest much before the issuance of show cause notice. We feel that the intention of the appellant have never been to misuse the cenvat credit or evade service tax on account of same and therefore, primarily we feel that since they have already reversed the cenvat credit and have also paid interest, there was no need to issue show cause notice left aside invoking the provisions of Rule 15 (3) of the Cenvat Credit Rules, 2004 for imposition of equal amount of penalty. 13. We also feel that adjudicating authority has travelled beyond the show cause notice, by imposing penalty under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong entry. He did not take the Cenvat credit or utilized the Cenvat Credit. It is in those circumstances the Tribunal was justified in holding that when the assessee has not taken the benefit of the Cenvat credit, there is no liability to pay interest. Before it can be taken, it had been reversed. In other words, once the entry was reversed, it is as if that the Cenvat credit was not available. Therefore, the said judgment of the Apex Court has no application to the facts of this case. It is only when the assessee had taken the credit, in other 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. 14. Thus we feel that since the original a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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