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TMI Blog2024 (10) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... taken utilized by the Appellant for payment of duty. In case credit has not been utilized there would be no liability for interest as have been held by Hon ble High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [ 2011 (4) TMI 969 - KARNATAKA HIGH COURT] . Appellant should produce a certificate from the statutory auditor to the effect, whether the excess credit taken by the Appellant during the first year of receipt of the capital goods has been utilized or not utilized before its reversal or till the first day of the next financial year as the case may be. Any interest on the credit so utilized if any should be paid forthwith. There are no merits in this order to the extent it confirms the recovery of CENVAT Credit and penalties imposed - appeal allowed. - MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) AND MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Shri Santosh Kumar Mishra, Advocate Shri Utkarsh Kumar Mishra, Advocate for the Appellant Ms. Chitra Srivastava, Authorized Representative for the Respondent ORDER This appeal is directed against Order-in-Original No.LKO/EXCUS/000/COM/ST/003/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Cenvat Credit Rules, 2004. III. Penalty should not be imposed under Section 78 of the Finance Act, 1994 read with Rule 15 (3) of Cenvat Credit Rules, 2004 for the aforesaid contraventions. IV. Penalty should not be imposed upon them under Section 77(1)(b) of the Finance Act, 1994 for the aforesaid contraventions. V. Penalty should not be imposed upon them under Section 77(1)(C) of the Finance Act, 1994 for the aforesaid contraventions. VI. Penalty should not be imposed upon them under Section 77(2) of the Finance Act, 1994 for the aforesaid contraventions. 2.4 Show cause notice has been adjudicated as per the impugned order. 2.5 Aggrieved Appellant has filed the appeal. 3.1 We have heard Shri Santosh Kumar Mishra Advocate for the Appellant and Ms. Chitra Srivastava Departmental Authorized Representative for the Revenue. 4.1 We have considered the impugned order along with submissions made in the appeal during the course of arguments. 4.2 Undisputedly Appellant by taking the credit on entire duty paid on capital goods in the first year itself have acted in contravention of provision of Cenvat Credit Rules. However the said credit was admissible to him on the first date of the next ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt financial year. Accordingly, only the liability for interest survives, no penalty is imposable on the appellant. Moreover, the reversal of substantial amount of Rs. 74,833/- out of Rs. 85,667/- also shows that the appellant became aware of the mistake, on being so pointed out by the Revenue. Considering the facts and circumstances and the credit being so available after few months, I set aside the demand of Rs. 85,667/-. Further, the interest is held payable and the same is confirmed. 4.4 In case of Nidhi Pipes [2016 (343) E.L.T. 1014 (Tri. - Chan.)] Chandigarh bench held as follows:- 5 . . I also hold that on capital goods, the appellant is entitled to take Cenvat credit 50% of the first year and remaining in the next year. Therefore, they are entitled to take Cenvat credit to the tune of 100% of the capital goods is at the most, the appellant is required to pay interest for intervening period. .. 4.5 In case of Bombay Paints Ltd. [2015 (326) E.L.T. 335 (Tri. - Mumbai)] Mumbai bench held as follows: 4 . Although the appellant is not in dispute as these are not capital goods and they are entitled to take CENVAT Credit to the tune of 50% of duty paid in the first year as per Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , while dealing with the identical issue has observed as under : 3. After hearing the learned S.D.R., I find that the appellants were admittedly entitled to the Modvat credit of the entire duty paid on the capital goods. It is only the timing of taking credit which is the subject matter of dispute. Instead of availing the credit to the extent of 50%, the appellant availed the entire 100% at the time of receipt of the goods itself. As the said credit so availed was not even utilised by the appellant, the same was more or less in the nature of a paper entry. As such it can be concluded that there was no mala fide on the part of the appellant to avail excess credit in the first year itself so as to invoke penal action against them. Accordingly, I set aside the penalties imposed upon the appellant in both the cases. The appeals are disposed off in above manner. 6. Similarly, the Tribunal, in the case of C.C.E., Pune v. Panse Autocomp Pvt. Ltd. as reported in 2008 (223) E.L.T. 253 (Tri.-Mum.) has held as under : 4. On a perusal of the records it is seen that the allegation against the respondent which result the confirmation of demand of duty was in respect of wrong availment of Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng interest against them. In any case, submits the learned Advocate that they became entitled to avail the balance 50% of the credit as on 1-4-2001 and as such, if interest is required to be confirmed it should be till the date of their entitlement to avail credit that is till 1-4-2001, in which case, it will come approximately to around Rs. 1300/-. As such, he submits that the amount being small, he is not contesting the quantum of interest and is ready to pay the same. 4 . I find force in the above contention of the learned Advocate. Without expressing any opinion as to whether the interest would be leviable on the quantum of Modvat credit which remains unutilized by them till the date of their entitlement, I direct the Authorities to calculate the interest from the date of availment till 1-4-2001, when they were admittedly entitled to take Cenvat credit in their record and to utilize the same. The appellants filed the requisite Return reflecting the fact and taking credit and thus bringing the same to the notice of the Revenue, no mala fide intention is attributed to them. In any case, the said credit was taken was not utilized prior to 1-4-01 and as such, it cannot be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit has been taken or utilized wrongly, the same along with interest shall be recovered from the manufacturer. Thus, Rule 14 does not provide any option to the Adjudicating Authority/Appellate Authority to waive the interest if the credit wrongly taken is not utilized and shows as balance in the cenvat credit account of the assessee/manufacturer. In other words, Rule 14 empowers the officers to charge interest in either case, i.e., in respect of cenvat credit taken or utilized wrongly. Thus, either taking the credit wrongly or utilizing the credit wrongly will attract interest in terms of Rule 14 of Cenvat Credit Rules, 2004. The Adjudicating Authority/Appellate Authority has misinterpreted the provisions of Rule 14 of Cenvat Credit Rules, 2004, while passing the Order-in-Original in so far as charging of interest is concerned. 5 . We have considered the submissions made by the learned DR and perused the records. It is seen from the records that the respondents contention that they have not utilized the amount of credit taken by them is not being disputed by the Revenue in their grounds of appeal. It is also a factual finding by the learned Commissioner that the credit availed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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