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Appellant availed CENVAT credit prior to making payment to service provider — Order confirming demand of duty by denying CENVAT credit of Rs.25,51,699 and imposition of penalty of Rs.10,000 — Appellant contended that it was mistake that happened and payment subsequently made to service providers — Denial of credit and demand of duty not justified — Claimed that it was clear violation of the CENVAT Credit Rules, 2004 — However taking into account subsequent payment, denial of the credit was set aside — However, interest was held payable for the period of wrong availment along with penalty of Rs.10,000.
Facts:
The appellant availed credit on input services prior to making payments to the service provider. However, it made payments before the issuance of the show-cause notice. The appellants argued that it was a mistake from their end and subsequent regularisation of the deficiency of the documents can be condoned. As per the Revenue, the payment of price and duty to the supplier of inputs and input services is different. Making the payment to the supplier of inputs was not a pre-condition for availing the credit. However, credit of the input services cannot be availed unless and until payment has been made to the service provider.
Held:
Held that the appellant had enjoyed monetary benefit and hence, was liable for the payment of interest and penalty. On the other hand, taking into account the subsequent payment made to the service provider denial of the credit was set aside.
