fiogf49gjkf0d
CENVAT credit availed and utilised on irregular basis — Such credit reversed before issuance of show-cause notice — Interest charged from the date of availment up to the date of reversal — Argued that interest if at all leviable — Should be from date of utilisation — Penalty — Imposed for suppression of facts in order to avail inadmissible credit — Penalty for irregular availment of inadmissible credit — Held, Appellant liable to pay interest on CENVAT credit irregularly availed — Penalty for suppression of facts set aside — Penalty for availment of inadmissible credit upheld.
Facts:
The appellant made wrongful/irregular availment and utilisation of CENVAT credit and voluntarily reversed the same. However, they were directed to pay interest under Rule 12/14 of the CENVAT Credit Rules, 2002/2004 for the period till the date of reversal. The appellant pleaded that the major part of the credit was not utilised. According to the appellant, interest was not payable for the fact that they had already reversed the credit before the issuance of the show-cause notice and against the allegation of suppression, the appellants argued that they had already disclosed all the material facts to Department through ER-1.
Held:
With regards to the interest payable on the wrong availment of credit it was held that reversal of credit before issuance of show-cause notice cannot take away the liability. Hence, appellant was held liable to pay the interest. However, it was concluded that there was no suppression of facts by the appellant and penalty on this count was withdrawn thus retaining penalty for wrong availment of credit.
