Wednesday, 24 September 2014

ST - CENVAT credit of service tax was wrongly availed by one unit but utilised by two units reversed in wake of audit objections

Sharavathy Conductors Pvt. Ltd. vs. CCE, Bengaluru-I 2013 (31) STR 47 (Tri.-Bang.)

Facts:

In this case, CENVAT credit of service tax was wrongly availed by one unit but utilised by two units reversed in wake of auditobjections. The department sought to charge interest on the said reversal.


Held:
The Tribunal observed that, intention to evade duty by Unit-I was not proven as both units owned by assessee and credit reversedundisputedly available to Unit-II. It is held that as per view taken in Gokaldas Images Pvt. Ltd. 2012 (28) STR 214 ( Kar.), if CENVATcredit in question is reversed, it amounts to not taking of credit at all. Hence no interest is imposable.

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