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TMI Blog2019 (8) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of interest - HELD THAT:- The fact that adequate credit balance is available during the material period and is not in dispute. Despite that credit has been pre-maturely reflected in the RG-23 register and ER-1 return since goods were not received in the factory, there is no consequent short payment of duty and hence no loss to exchequer - Moreover, as the Ld. Commissioner himself has observed that for mere procedural lapse, the substantial benefit of credit cannot be denied, more particularly in case where there is a sufficient credit balance always available during the period in dispute - interest cannot be levied when sufficient credit balance is available, despite that a portion of credit amount has been availed contrary to the guidelines issued in trade notices, inasmuch as in such cases there is no loss to the exchequer and therefore there cannot be any question to compensate the Revenue by levying interest. The demand of interest and the penalty imposed cannot be sustained and accordingly, the same are set aside - appeal allowed - decided in favor of appellant. - Appeal No. E/76379/2017 - FO/A/76000/2019 - Dated:- 13-8-2019 - SHRI P.K. CHOUDHARY, MEMBER (JUDIC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the subject invoices which are in dispute. The Ld. Commissioner also noted that the appellant assessee, while dispatching the inputs from the storage tank to the factory, debited the applicable credit amount from its Register maintained at the outside storage and re-credited the subject credit when the subject input entered the factory premises. The said entries have been duly reflected in ER-1 under the head other payments . It is the submission of the Ld. CA that two important facts are thus not in dispute, first, that the appellant had sufficient balance of credit balances and second, that the appellant has duly disclosed the fact of availment of credit in ER-1 returns, though there may be irregular availment of credit on inputs stored outside factory, and therefore there is no question of any suppression. 5. The Ld. CA further submitted that the Ld. Commissioner in para 5.13 wrongly applied the Tribunal s decision in the case of CCE, Mumbai I vs. KRCD Ltd- 2014(303) ELT 587(Tri- Mum) to confirm imposition of interest of ₹ 10,74,459/- under Section 11AA of the Central Excise Act, 1944 and penalty of ₹ 5,00,000/- under Rule 15(2) of the Credit Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) CCE, Ghaziabad vs. Ashoka Metal Decor (P) Ltd.[2011 (21) S.T.R. 469 (All.)] 8. As an alternative argument, he pleaded that the Ld. Commissioner has duly accepted that the storage tank is an extension of the factory . Having accepted the settled legal principle that the storage tank is an extension of factory , the inputs received in the storage tank would be legally eligible for credit without any further procedural requirement. On this count also, the availment of credit cannot be said to be pre-mature, and hence interest is not leviable. With regard to the observation made by the Ld. Commissioner that the appellant had suo-moto paid the interest amount, he submitted that any amount paid in the course of the adjudication proceedings is deemed to be made under protest and hence to be considered as a deposit since the assessee has contested the demand raised in consequence to final adjudication thereof. In support of his contentions, he relied on the following decisions: Maihar Cement v. CCE, Bhopal 2004 (178) ELT 991 (Tri-Del.), Jayant Glass Inds. (P) Ltd. v. CCE, Kolkata 2003 (155) ELT 188 (Tri-LB, Delhi), U.P. State Sugar Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the appellant could not plead immunity from interest liability for premature availment of credit together with penalty as rightly imposed by the Ld. Commissioner in the adjudication order for contravention of the conditions prescribed for availing the facility to store goods outside the factory. 10. Heard both sides and perused the appeal records. 11. I find that the issues that arise for consideration before me is whether penalty and interest can be imposed for availing Cenvat credit on inputs stored outside the factory. 11.1 First, I deal with the issue regarding the imposition of penalty. I find that the Ld. Commissioner has made a detailed examination of the ER-1 returns filed by the appellant, on perusal of which he has given a specific finding in para 5.10 of the adjudication order that availment and reversal of credits have duly been reflected in the said returns which is based on the RG-23A Pt-II registers maintained at both the places within the factory as well as the Storage tank located outside the factory. He also observed that said availment of credit has been shown under the head of other payment in E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to the facts of the present case. Moreover, as the Ld. Commissioner himself has observed that for mere procedural lapse, the substantial benefit of credit cannot be denied, more particularly in case where there is a sufficient credit balance always available during the period in dispute. I also take note of the ratio of the decision rendered in Savio India Ltd. v. Commr of Customs and C.EX and S.Tax, Coimbatore 2016 (340) ELT 735 (Tri- Chennai) wherein it has been held that - .........That indicates that there was sufficient balance of Cenvat Credit in the statutory record maintained by the appellant, which is RG-23 Part II register. The worksheet is also annexed to that letter exhibiting such position. In existence of sufficient balance, there shall not be levy of interest and so also there shall not be levy of penalty on the appellant. Accordingly appeal is allowed to this extent. Identical views have been expressed by the Hon ble Madras High Court in Commr of C.Ex., Puducherry Commissionerate vs. CESTAT, Chennai (Supra), and by Hon ble Punjab Haryana High Court in Maruti Udyog Limited which was followed by subsequently upheld by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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