Custom, Excise & Service Tax Tribunal
Hyundai Motor India Ltd vs Commissioner Of C.Ex.&Service Tax, Ltu ... on 20 May, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos.E/669, 670/2010
[Arising out of Order-in-Appeal No.74 & 75/2010 dt. 16.8.2010 passed by the Commissioner (Appeals), Central Excise & Service Tax, LTU, Chennai]
For approval and signature:
Honble Ms.JYOTI BALASUNDARAM, Vice-President
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Hyundai Motor India Ltd.
Appellants
Versus
Commissioner of C.Ex.&Service Tax, LTU Chennai
Respondent
Appearance:
Shri R.Narayanaswamy, Manager (Taxation) Shri A.B.Niranjan Babu, SDR For the Appellants For the Respondent CORAM:
Honble Ms.Jyoti Balasundaram, Vice-President Date of hearing : 20.5.2011 Date of decision : 20.5.2011 Final Order No.____________ The assessees herein are engaged in the manufacture of motor car components and parts thereof. CENVAT credit had been taken by them more than once on the same input invoices and on it being pointed out by the departmental authorities, they reversed the credit but did not pay interest on belated reversal of wrongly availed credit. Hence SCNs for recovery of interest of Rs.2,41,074/- and Rs.1,24,455/- along with proposal for imposition of penalties were issued. The interest amounts were confirmed and penalties of Rs.3000/- each were imposed. The orders were upheld by the Commissioner (Appeals) ; hence these appeals before the Tribunal.
2. Heard both sides. The assessees have paid interest amounts consequent to the judgement of the Honble Supreme Court in Union of India Vs Ind-Swift Laboratories Ltd. [2011 (265) ELT 3 (SC)] holding that interest on irregular credit arises from the date of availing the credit and not only from the date of its utilization. Therefore, the prayer before the Tribunal is confined to setting aside of the penalties. I find that the issue as to whether interest becomes payable from the date of availing credit or only from the date of its utilization was the subject matter of dispute before the Tribunal which had decided in the case of CCE Pondicherry Vs Superfil Products [2009 (237) ETL 551] that interest liability arises only on utilization of irregular credit and the Supreme Courts decision cited supra holding that the interest liability arises right from the date of availment of irregular credit is of February 2011.
In these circumstances, the assessees are correct in contending that the issue of payment of interest was debatable and became finally settled only with the apex courts decision cited supra and, therefore, they cannot be held liable to penalty as the circumstances do not warrant imposition of penalty.
I, therefore, set aside the penalties imposed on the assessees and allow the appeals partly, by upholding liability to interest (which has been paid by the assessees) but setting aside penalties.
(Dictated and pronounced in open court) (JYOTI BALASUNDARAM) VICE-PRESIDENT gs 4