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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MADRAS
MS. JYOTI BALASUNDARAM, J.
International Flavours and Fragrances (I) Ltd. -Appellant
Versus
Commissioner of Central Excise, Chennai -Respondent
Final Order No. 732/2010 Appeal No. E/711/2009, 732 of 2010, 711 of 2009
Decided On : 02-07-2010
M. Karthikeyan,Indira Sisupal
Ms. Jyoti Balasundaram, Vice-President - The issue in dispute in this appeal is as to what is the relevant date from which interest becomes payable and penalty becomes imposable from the date of utilization of credit or from the date of availment of such credit.
2. I have heard both sides. As regards levy of interest, I agree with the assessees that interest liability arises only from the date of wrong utilization of credit in the light of the decision of the Punjab & Haryana High Court in CCE, Delhi Vs. Maruti Udyog Ltd. - 2007 (214) ELT 173 (P&H)andInd-Swift Laboratories Ltd. Vs. UOI - 2009 (240) ELT 328 (P&H). I, therefore, set aside the interest liability from the date of availment of credit and hold that the assessees are liable to pay interest only from the date of utilization of such credit.
3. As regards penalty, I see force in the submission of the assessees that penalty is not sustainable in the facts of the present case as the credit was initially taken correctly on the duty paid inputs, thus resulting in non-applicability of clause (i) of Rule 15 of the Cenvat Credit Rules, 2004, and clause (ii) of Rule 15 which provides for taking and utilization of credit wrongly availed by fraud, collusion, wilful mis-statement or suppression of facts with an intention to evade payment of duty is not applicable as no such case is spelt out in the notice. I, therefore, set aside the impugned order and allow the appeal.
