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April 2015

[2015-TIOL-402-CESTAT-AHM] Oil and Natural Gas Corporation Ltd vs. Commissioner of Central Excise & Service Tax, Surat.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Interest is not payable with respect to duty
required to be debited in the CENVAT Credit Account provided sufficient
balance was available in the CENVAT Account.

Facts
The
Appellant made making cash payment of service tax on a monthly basis,
however part of the tax required to be debited from the CENVAT Account
was paid on a quarterly basis. The department demanded interest for the
delay in debiting the CENVAT credit account.

Held:
The
Tribunal noted that even in cases of clandestine removal or non-payment
of taxes, admissible CENVAT credit during the relevant period of demand
is given abatement from the total duty demanded and interest is charged
only on the balance demand. Since sufficient balance is available in
the CENVAT account, interest is not payable for the delay in debiting
the CENVAT account.

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