Interest is not payable with respect to duty required to be debited in the CENVAT Credit

Oil and Natural Gas Corporation Ltd. vs. commissioner of central Excise and Service Tax, Surat. [2015-TIOL-402-CESTAT-AHM402-CESTAT-AHM]

Interest is not payable with respect to duty required to be debited in the CENVAT Credit Account provided sufficient balance was available in the CENVAT Account.

FACTS:

The Appellant made making cash payment of service tax on monthly basis, however part of the tax required to be debited from the CENVAT Account was paid on a quarterly basis, The department demanded interest for the delay in debiting the CENVAT credit account.

HELD:

The Tribunal noted that even in cases of clandestine removal or non-payment of taxes, admissible CENVAT credit during the relevant period of demand is given abatement from the total duly demanded and interest is charged only on the balance demand, since sufficient charged only on the balance demand.  Since sufficient balance is available in the CENVAT account, interest is not payable for the delay debiting the CENVAT account.