By TIOL News Service

BANGALORE, JULY 17, 2018: THIS is a Revenue appeal against the CESTAT order dated 19/08/2016 - 2017-TIOL-759-CESTAT-BANG.

Following the order in Commissioner of Central Excise & Sales Tax, LTU, Bangalore Vs. Bill Forge Pvt.Ltd. - 2011-TIOL-799-HC-KAR-CX, the Tribunal had held thus -

Central Excise - CENVAT Credit - In view of the precedents, assessee is not liable to pay interest and penalty on the wrongly availed credit since assessee had reversed the credit before utilization of the same and a small portion of the credit that was utilized was reversed along with interest before issuance of SCN - Hence, impugned order set aside - Appeal allowed with consequential relief: CESTAT [para 5]

In appeal, the Counsel for Revenue submitted that since the Respondent Assessee admitted the mistake of Cenvat Credit availed with respect to Basic Customs Duty and Cess on Textiles and it is only when the said mistake was pointed out by the Officer of the Department who visited the Business place of the Assessee, the said entry was reversed by the Respondent Assessee, therefore the learned Tribunal was not justified in setting aside the concurrent finding of the Adjudicating Authority as well as the First Appellate Authority, imposing the interest and penalty on the Respondent Assessee. Reliance was placed on the decisions in Illpea Paramount Pvt.Ltd. - 2006-TIOL-417-HC-P&H-CX ; and Ind-Swift Laboratories Ltd. - 2011-TIOL-21-SC-CX.

The High Court considered the submissions and observed that no substantial question of law arises in the present case and the controversy involved is squarely covered by the decision of the co-ordinate Bench in the case of Commissioner of Central Excise & Sales Tax, LTU, Bangalore Vs. Bill Forge Pvt.Ltd. - 2011-TIOL-799-HC-KAR-CX.

Extracting portions from the said order, the High Court observed that the judgments cited by the counsel for Revenue were 'absolutely distinguishable on facts and do not enure to the benefit of the Appellant -Revenue '.

The High Court further noted -

"8. The imposition of penalty and interest in the present case has been set aside by the learned Tribunal essentially on the ground that soon upon the mistake being pointed out by the Officer of the Department, the Respondent Assessee immediately reversed the Cenvat Credit wrongly availed by it in respect of the Basic Customs Duty (BCD) and Cess on Textiles.

9. In view of this, there cannot be said to be any mis-statement, fraud or collusion on the part of the Respondent Assessee through which it wanted to evade the Excise Duty in question. Therefore, the setting aside of the interest and penalty in these circumstances cannot be faulted."

The Revenue appeal was dismissed.

(See 2018-TIOL-1363-HC-KAR-CX)