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TMI Blog2020 (2) TMI 1491X X X X Extracts X X X X X X X X Extracts X X X X ..... has held that where before the utilization of the credit amount, if the entry is reversed, it amounts to not taking credit. Once the credit is reversed before its utilization in the Cenvat account it does not amount to taking of credit. Thus, the provisions of Rule 14 of Cenvat Credit Rules and Section 11AB of the Act are not attracted and neither the penalty nor the interest is chargeable. Since the appellant had sufficient credit balances as noted above, in any case, there would be no loss of Revenue to the exchequer. Therefore, the imposition of interest in the present proceedings cannot sustain and hence, the same is set aside - Appeal allowed - decided in favor of appellant. - Excise Appeal No.78936 of 2018 - FINAL ORDER NO.77061/2019 - Dated:- 5-2-2020 - SHRI P. K. CHOUDHARY, HON BLE JUDICIAL MEMBER Shri Ankit Kanodia, C.A. for the Appellant Shri S. Mukhopadhyay, Authorized Representative for the Respondent ORDER 1. The appellant assessee is in appeal against the Order-in-Appeal dated 24/09/2018 for confirmation of demand of ₹ 94,120/- as irregular Cenvat credit of Cess on custom duty and interest on an amount of ₹ 9,51,500/- as confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit and not by showing the same as reversal of Cenvat credit. Further, as regards interest on the total amount of ₹ 9,51,500/- as confirmed by the Commissioner (Appeals), he stated that when demand to the extent of ₹ 4,11,713/- has only been confirmed than the question of interest on amount of ₹ 9,51,500/- is not tenable at all. Further, he stated that the Appellant has already paid an interest of ₹ 41,452. As regards interest, he further stated that the Appellant has not paid interest on an amount of ₹ 2,27,983/- on account of irregular availment of Cenvat credit in certain input services during October 12 to March 13 which was reversed by the Appellant in May 2014 and Irregular availment of ₹ 5,39,787/- as Cenvat Credit availed in excess on capital goods in the first year itself i.e. on 30/03/2013 instead of on 01/04/2013 on the ground that there was always sufficient balance in the Cenvat credit ledger of the Appellant and that the said amounts were not utilised for payment of duty and hence interest under Rule 14 of CCR, 2004 cannot be made applicable. For this the Ld. CA has also produced a CA certificate showing the closing balances of Cenv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure whereby the manufacturers can utilize 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 of 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 liability to pay interest. Section 11AB of the Act is attracted only on delayed payment of duty i.e., where only duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person liable to pay duty, shall in addition to the duty is liable to pay interest. Section do not stipulate interest is payable from the date of book entry, showing entitlement of Cenvat credit. Interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as reported in Commissioner v. Maruti Udyog Ltd. - 2007 (214) E.L.T. A50 (S.C.). 14. Further, in CCE, Ghaziabad vs. Ashoka Metal Decor (P) Ltd.[2011 (21) S.T.R. 469 (All.)] the Hon ble High Court held that when the wrong credit is not utilized for payment of final output duty on final products, neither the assessee gets any advantage nor there is any Revenue loss to the Government. The Hon ble High Court followed the legal principles upheld by the Hon ble Supreme Court in CCE vs. Maruti Udyog Ltd (Supra). ..Such amount credited in the Cenvat account was available for the payment of duty but the same was not utilized for payment of duty and subsequently, the Assessee has reversed the Cenvat Credit entry in the Cenvat account. The Apex Court in the case of Commissioner of Central Excise, Mumbai-I v. Bombay Dyeing Manufacturing Company Limited, reported in 2007 (215) E.L.T. 3 (S.C.) has held that where before the utilization of the credit amount, if the entry is reversed, it amounts to not taking credit. Once the credit is reversed before its utilization in the Cenvat account it does not amount to taking of credit. Thus, the provisions of Rule 14 of Cenvat Credit Rules and Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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