By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Mere availing of wrong CENVAT Credit without utilising the same attracts levy of interest.
Facts:
The Respondent a manufacturer of excisable goods availed CENVAT credit which was subsequently reversed without being utilised. The Tribunal relying on the decision of the Punjab and Haryana High Court in the case of Ind-Swift Laboratories Ltd. [2009-TIOL-440-HC-P&H-CX] set aside the interest liability as the CENVAT Credit was merely availed and not utilised. Aggrieved thereby, the present appeal is filed by the department.
Held:
Relying on the decision of the Apex Court in the matter of Ind-Swift Laboratories Ltd. [2011-TIOL-21-SC-CX], the Hon’ble High Court set aside the order of the Tribunal. Respondent argued that on a combined reading of sections 11A and11AB of the Central Excise Act,1944 appearing in Rule 14 of the CENVAT Credit Rules,2004, it would reveal that payment of interest would arise only when there is an amount payable as determined by the authority, however as per the facts of the case there is no question of payment as there is a mere availment. However, the High Court proceeded to rely on the judgment of the Apex court and allowed the appeal of the department. However, since the Tribunal allowed the appeal in view of the judgment of the Punjab and Haryana High Court without going into other aspects of the matter, the matter was remitted back.
