National Aluminium Company Limited Vs Commissioner of Central Excise & Service Tax (CESTAT Kolkata)
CESTAT Kolkata held that as per substituted provisions of Rule 14 of the CENVAT Credit Rules, interest is not leviable where wrongly availed credit is only taken but not utilized.
Facts- Due to a clerical error, the Appellant had inadvertently taken CENVAT Credit on duty paid documents twice. On realising its mistake, the Appellant suo-moto reversed such credit taken by it. The said facts are not in dispute. The Ld. Adjudicating authority observed that although the Appellant has reversed the excess credit taken, it had utilized the same and thus, failed to pay appropriate interest chargeable thereon.
Conclusion- Held that in light of the substitution of Rule 14 of the CENVAT Credit Rules, the intention of legislature, not to impose interest where credit has only been taken but has not been utilized, is duly evident. I also hold that the judgment relied upon by the Ld. Authorized Representative for the Department is distinguishable on facts and is therefore not applicable to the present case of the Appellant.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The instant Appeals have been filed by M/s. National Aluminium Company Limited, against the Order-in-Appeals passed by the Ld. Commissioner, Customs & Service tax, Bhubaneswar (Appeals), whereby the levy of interest has been confirmed under Rule 14 of the Cenvat Credit Rules, 2004 (“CCR”) read with Section 11AB of the Central Excise Act, 1944 on the amount of Cenvat credit taken inadvertently but not utilized.
2. Briefly stated, the facts of the case are that due to a clerical error, the Appellant had inadvertently taken CENVAT Credit on duty paid documents twice. On realising its mistake, the Appellant suo-moto reversed such credit taken by it. The said facts are not in dispute. The Ld. Adjudicating authority observed that although the Appellant has reversed the excess credit taken, it had utilized the same and thus, failed to pay appropriate interest chargeable thereon. The said matters travelled upto the High Court, which set aside the orders vide its Order dated 30.11.2022 and restored the file before the Tribunal for fresh hearing on merits.The summary of the case details is provided herein-below:
