Commissioner of C. Ex. vs Delphi TVS Diesel Systmes Ltd.

T.S. Sivagnanam, J.

This appeal by the Revenue is directed against the Final Order No. 767 of 2010, dated 12-7-2010 on the file of Customs, Excise and Service Tax Appellate Tribunal, Chennai Bench. The appeal has been admitted on the following substantial question of law :--

"The Tribunal being creation of the statute, whether it can traverse beyond the provisions of Cenvat Credit Rules, 2004 when the same has the force of a statute?"

The facts which are necessary are that the respondent/assessee are registered manufacturers of Fuel Injection Pumps, Parts of IC Engine, Filter Assembly, etc., falling under CETH No. 8413 30 10, 8409 99 30, 8421 23 00 of the Central Excise Tariff Act, 1985 and are availing Cenvat credit on inputs, capital goods and input services. During the course of verification of return filed for the periods 2007-08 and 2008-09, the Department noticed that the assessee had wrongly availed Cenvat credit to the tune of Rs. 1,05,66,981/- against the invoices for purchase of capital goods relating to their Unit, at Vaipur, Oragadam. On being pointed out, the assessee reversed the credit. Since the invoices under which Cenvat credit was availed does not pertain to their Mannur Unit, a show cause notice was issued on 27-7-2009 demanding interest under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of Central Excise Rules, 1944 and established the proposal for penalty. Aggrieved by the said order, the assessee filed appeal before the Customs, Excise and Service Tax Appellate Tribunal (in short "Tribunal").

The Tribunal, by order dated 12-7-2010, set aside the order of the adjudicating authority holding that interest is not payable when the credit is reversed before utilization. It is against the said order, the Revenue has filed this appeal, which is admitted on the substantial question of law referred supra.

We have heard the learned Counsel for the parties and perused the materials placed on record. The issue relating to whether interest is payable for having wrongly taken credit in terms of Rule 14 of Cenvat Credit Rules read with Section 11AB of Central Excise Act, 1944 came up for consideration before this Court in C.M.A. No. 3477 of 2010 [The Commissioner of Central Excise v. M/s. Sundaram Fasteners Limited) an 30-1-2014 [ Commr. of Central Excise Vs. Sundaram Fasteners Limited, . Since the issue involved in this appeal is squarely covered by the said decision, applying the said decision, the appeal filed by the Revenue stands allowed and the order passed by the Tribunal is set aside. No costs.