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TMI Blog2023 (10) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... HARYANA HIGH COURT] , wherein a Bench of this Court had held that where the cenvat credit was wrongly availed and was reversed before utilizing the same, there was no justification for demand of interest and upon Grasim Bhiwani Textile Ltd. s case [ 2018 (6) TMI 43 - PUNJAB AND HARYANA HIGH COURT] , wherein a Coordinate Bench of this Court was dealing with a similar question in a case under Central Excise Act, 1944. The assessee had been availing credit of service tax paid on input service. On a perusal of Annexure P-5 which is extract of electronic credit ledger during the period from August 2017 till December 2018, it is revealed that an amount of Rs. 14,05,78,663/- was entered as amount of ITC accrued through inputs as in August 2017. As on that date, an amount of Rs. 81,95,564/- was already lying as balance ITC. It is also revealed that during the month of August 2017, the petitioner had central tax liability of Rs. 1,61,71,190/- which it discharged using its ITC and thereafter a balance of Rs. 13,26,03,037/- was reflected as balance ITC during the month of August 2017. Meaning thereby that the petitioner did not utilize the excess ITC of Rs. 12,65,20,827/- during the month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TC was on account of credit availed on inputs during the month of July 2017 and cenvat credit transaction from the erstwhile VAT regime. The petitioner debited its electronic credit ledger with an amount of Rs. 1,59,55,219/- towards its central tax liability for that month and thereafter was left with balance of Rs. 81,95,564/- as ITC. During the month of August 2017, the petitioner was entitled to avail ITC to the extent of Rs. 1,40,57,836/-. However, while making entry in the electronic credit ledger and filing return for the month of August 2017, inadvertently the petitioner typed the amount of ITC as Rs. 14,05,78,663/- instead of Rs. 1,40,57,836/- thereby claiming excess ITC to the tune of Rs. 12,65,20,827/-. For that particular month, the central tax liability of the petitioner was to the tune of Rs. 1,61,71,190/- and after discharging it by using its ITC, the balance in the electronic credit ledger account of the petitioner was left as Rs. 13,26,03,037/-. The petitioner came to know about the error made in entering the amount of ITC only while filing return on 28.12.2017. The petitioner thereafter kept on requesting the respondents by sending E-mail to guide in the matter as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it was liable to pay interest on availment of excess ITC as per Section 50 (3) of the CGST Act as well as the penalty and the impugned orders had been rightly passed. Therefore, dismissal of the writ petition had been prayed for. 7. We have heard learned counsel for both the parties at considerable length and have carefully gone through the record. 8. It may be mentioned at the outset that the plea taken in the writ petition that the impugned show cause notice had not been issued by a proper officer having jurisdiction, had not been pressed by learned counsel for the petitioner during the course of arguments and the arguments rendered by him were restricted to the question on validity of order dated 29.04.2022 as passed by the respondent No. 4 whereby interest on amount of Rs. 21,13,354/- and penalty of equal amount was imposed. The main thrust of argument as raised by learned counsel for the petitioner is that the respondent No. 4 had erred in assuming that the petitioner had utilized an amount of Rs. 21,13,354/- out of the amount of excess ITC wrongly taken in electronic credit ledger in August 2017. He argued that while passing the impugned order, the respondent No. 4 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty equivalent to the demanded amount that was mandatory. With these submissions, it was argued that the impugned order did not suffer from any error or irregularity and did not warrant any interference. 10. On giving due deliberations to the contentions as raised by both the sides and on a perusal of the material placed on record, it emerges that there is no dispute between the parties about the fact that during the month of August 2017, the petitioner was entitled to take ITC of Rs. 1,40,57,836/- and had claimed an amount of Rs. 14,05,78,663/- instead of the abovesaid amount. Meaning thereby that it had taken excess ITC to the tune of Rs. 12,65,20,827/- in its return of the said month. It is also not in dispute that the petitioner had reversed the amount so taken in excess as on 18.08.2018 and the same was duly reflected in its GSTR-3B return for that month (Annexure P-7). The respondent No. 5 had conducted audit of the petitioner during the period from 27.07.2020 to 29.07.2020 and thereafter show cause notice dated 27.10.2020 (Annexure P-8) was issued upon the petitioner by respondent No. 5 and the said notice was adjudicated by FORM GST DRC-7 (Annexure P-2) on 31.03.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax paid on input service. The department pointed out that the credit so availed was not admissible to the assessee and then the assessee reversed the credit amount. A show cause notice demanding interest and penalty was issued and confirmed. It was held that the cenvat credit if reversed prior to utilizing, demand of interest and penalty was untenable. Similar proposition of law was laid down by High Court of Adjudicature at Patna in M/s Commercial Steel Engineering Corporation v. State of Bihar and others, 2019 (28) G.S.T.L. 579. 12. On a perusal of Annexure P-5 which is extract of electronic credit ledger during the period from August 2017 till December 2018, it is revealed that an amount of Rs. 14,05,78,663/- was entered as amount of ITC accrued through inputs as in August 2017. As on that date, an amount of Rs. 81,95,564/- was already lying as balance ITC. It is also revealed that during the month of August 2017, the petitioner had central tax liability of Rs. 1,61,71,190/- which it discharged using its ITC and thereafter a balance of Rs. 13,26,03,037/- was reflected as balance ITC during the month of August 2017. Meaning thereby that the petitioner did not utili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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