By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Wrong availment of excess CENVAT Credit – In view of accounting mistake, the appellant being a public sector unit and having regard to the size and operations of the Company and the fact that the appellant had excess CENVAT Credit during the relevant period, section 80 of the Finance Act, 1994 was invoked and penalty was set aside. Wrong availment of excess CENVAT Credit – Interest payable in view of Hon’ble Supreme Court’s decision in case of Ind Swift Laboratories Ltd. 2011 (265) ELT 2 (SC).
Facts:
The appellants availed CENVAT credit in excess on those services which were not covered under Rule 6(5) but once the department indicated the same, the appellants immediately reversed such CENVAT credit wrongly availed, but did not pay the interest under Rule 15 of CCR, 2004 r.w.s. 11AC of Central Excise Act, 1944.
The appellant did not pay interest, in view of the interpretation of law prevailing during the relevant time wherein there were several decisions of the Tribunal and the High Court taking a view that interest was not payable if CENVAT credit was taken but not utilised. It was a fact that the excess CENVAT could not have been so utilised, as the appellant did not utilise credit more than the disputed amount during the said period.
The appellants prayed for waiver of penalty in view of section 80 as the mistake was bonafide.
Held:
Interest was payable on wrong availment of CENVAT credit in view of the Hon’ble Supreme Court’s decision in case of Ind Swift Laboratories Ltd. (supra)
The appellants were a public sector unit and having regard to the size and operations of the appellants and the peculiar situation that there was an accounting error and that there was excess CENVAT credit with the appellants during the relevant period, penalty was set aside.
