Custom, Excise & Service Tax Tribunal
M/S Hng Float Glass Ltd vs Commissioner Of Central Excise … on 19 January, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : E/11720/2014 (Arising out of OIO-VAD-EXCUS-002-COM-068-13-14 passed by Commissioner of Central Excise, and Service Tax-Vadodara-II) M/s Hng Float Glass Ltd. : Appellant (s) Vs Commissioner of Central Excise and Service Tax, - Vadodara-II : Respondent (s)
For Appellant (s) : Shri S. R. Dixit, Advocate
For Respondent (s): Shri A. Mishra, AR
Dr. D. M. Misra, Hon’ble Member (Judicial)
Date of Hearing: 10.11.2017
Date of Decision: 19.01.2018
ORDER No. A/10154 / 2018
Per : Dr. D. M. Misra
This is an appeal filed against the OIO-VAD-EXCUS-002-COM-068-13-14 passed by the Commissioner of Central Excise, and Service Tax-Vadodara-II.
2. Briefly stated the facts of the case are that the appellant had wrongly taken excess credit of Rs.9,97,32,292/- during the period September 2008 to January 2009 on imported capital goods. Consequently, they have reversed the credit in February 2009, but availed to discharge interest for wrong availment of the said credit. Consequently, a show cause notice was issued to them on 31.08.2009 proposing recovery of interest of Rs. 17,80,894/- under the provisions of Section 11AB readwith Rule 14 of CCR, 2004 and penalty. On adjudication, the demand was confirmed, however, no penalty imposed. Hence, the present appeal.
3. Ld. Advocate Shri S. R. Dixit for the appellant submits that due to inadvertent errors they had availed Cenvat credit on the duty forgone on capital goods imported under EPCG Scheme during the period September 2008 to January 2009 and such credit was voluntarily reversed by them before being pointed out by the department. It is his contention that since the appellant had reversed the credit, no demand for recovery was issued and therefore demanding interest alone is not sustainable in law. In support, the Ld. Advocate referred to the judgement of the Honble Karnataka High Court in the case of Commissioner of Central Excise & Bangalore-III vs. Bharat Heavy Electricals Ltd. 2010 (257) ELT 369 (Kar.). Further, he has submitted that on the time barred demands, no interest is leviable even if the amount has been paid. In support, he refers to the judgement of the Honble Gujarat High Court in the case of CCE & C. Vadodara-II vs. Gujarat Narmada Fertilizers Co. Ltd 2012 (285) ELT 336 (Guj.). Further, he has submitted that the principle of laid down by the Honble Supreme Court in the case of Union of India vs. Ind-Swift Laboratories Ltd. 2012 (25) STR 184 (S.C.), since delivered in a different set of circumstances not applicable to the facts of the present case. Further, he has submitted the judgement of this Tribunal in the case of Atul Ltd. and others vide final order No. A/10685-10696/2017 dated 31.03.2017 could not be applicable to the facts and circumstances of the present case, as no duty has been determined under Section 11A of CEA, 1944, and the demand for interest was only issued.
4. Per contra, the Ld. AR for the Revenue reiterated the findings of the adjudicating authority. Further, he has contended that it is a simple case of availment of erroneous Cenvat credit of capital goods imported during the period September 2008 to January 2009 hence, along with reversal of erroneous credit, the appellant ought to have paid the interest. It is his contention that there is no issue of determination of duty as was in the Bharat Heavy Electricals Ltds case, but an erroneous credit availed which the appellant are not eligible and accordingly reversed on realization of the said mistake. Therefore, the principle laid down in the said case is not applicable to the facts of the present case. Similarly, the present demand was issued for the normal period of limitation, therefore, the principle laid down in GNFCs case also not applicable to the facts and circumstances of the case. He has further submitted that this Tribunal has already considered the issue in Atul Ltd. and others Final Order No. A/10685-10696/2017 dated 31.03.2017 and held that interest is payable for the normal period.
5. Heard both sides and perused the records. The limited issue involved in the present appeal is: whether interest is payable on the erroneous Cenvat credit availed during the period September 2008 to January 2009. There is no dispute of the fact that the appellant had incorrectly availed Cenvat credit of the amount of additional customs duty and countervailing duty forgone while the capital goods are imported under the EPCG Scheme. It is the contention of the appellant that since the said credit has not been utilized, therefore, interest for the intervening period is not applicable. I find that this Tribunal in the case of Atul Ltd. and others vide its final order No. A/10685-10696/2017 dated 30.03.2017 after analyzing the principles of the law laid down in this regard held that erroneous credit availed even if not utilized; interest could be applicable for the normal period of limitation. This Tribunal observed as: