Pradeep Jain - Chartered Accountant

is reversal of cenvat credit of Rule 4(5) is attract interest if reversal of credit not done with in 180 days. but we have sufficiant cenvat credit balance in our account.

As per Rule 14 regarding Recovery of Cenvat Credit wrongly taken or erroneously refunded, it has been stated that “Where the Cenvat Credit has been taken and utilised wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer of the provider of the output service and the provisions of section 11A and 11AA of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries.” However in your case you have taken credit but not wrongly utilized it as there was sufficient Cenvat credit balance in your account. Therefore it does not amount to any loss to Revenue and there is no contravention. Thus you are not required to pay any interest on the reversal of credit not done within 180 days. We also wish to submit that similar view has been taken in the case of Sandvik Asia Ltd. Vs CCE, Ahmedabad [2010 (260) E.L.T. 81 (Tri.-Ahd)]. The head note of the case is produced as follows for your reference:- Interest - Cenvat/Modvat - Goods sent for job work but not received back within 180 days - Credit reversed after 180 days - Rule 4(5)(a) of Cenvat Credit Rules, 2004 providing for such reversal not provide any time-limit for same - Reasonable interpretation that such reversal be made immediately on expiry of 180 days - Rule 4(5)(a) ibid not provide for any interest or consequences of non-reversal of credit on expiry of 180 days - Rule 14 ibid provides where credit has been taken or utilised wrongly or has been refunded erroneously, for recovery of interest - Not clear presently whether credit required to be reversed was utilised or the same continued to remain in the account books - No interest if credit continued to remain in the account books - For verification of factual position, impugned order set aside and matter remanded to adjudicating authority. [paras 3, 4, 5, 6, 7, 8, 9, 10]

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Comments

is reversal of cenvat credit of Rule 4(5) is attract interest if reversal of credit not done with in 180 days. but we have sufficiant cenvat credit balance in our account.

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