Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)
New Delhi, dated the 3rd September, 2009.
Circular No. 897/17/2009-CX
To,
All Director Generals,
All Chief Commissioners of Central Excise (including LTU),
All Commissioners of Central Excise (including LTU).
Sir/ Madam,
Subject: Liability of interest where CENVAT credit was wrongly taken but
reversed by assessee
before utilization--reg.
Representation has been received from the field formation stating that the
decision of Hon’ble
High Court of P&H in the case of CCE, Delhi III V/s Maruti Udyog Ltd.
[2007(214)ELT173(P&H)],
has upheld the order of Tribunal wherein it was held that assessee is not liable
to pay interest in the case
where credit was only taken and not utilized. The SLP against this order has
been dismissed by the
Hon’ble Supreme Court. On the other hand, Rule 14 of The CENVAT Credit Rules,
2004, provides for
recovery of credit taken or utilized wrongly with interest. In view of this
conflict in legal provisions
and the decision of Hon’ble Supreme Court, a clarification has been requested
from the Board.
- The matter has been examined. It is seen that the Tribunal decision and the
High Court judgement
referred to above, was delivered in the context of erstwhile Rule 57I of the
Central Excise Rules, 1944
and that the Supreme Court order under reference is only a decision and not a
judgement. Since, the
Rule 14 of the CENVAT Credit Rules, 2004, is clear and unambiguous in the
position that interest
would be recoverable when CENVAT credit is taken or utilized wrongly, it is
clarified that the interest
shall be recoverable when credit has been wrongly taken, even if it has not been
utilized, in terms of the
wordings of the present Rule 14.
- Trade & Industry as well as field formations may be suitably informed.
- Receipt of this circular may kindly be acknowledged.
- Hindi version will follow.
Yours faithfully,
(Amish Kumar Gupta)
OSD (CX-8)
F.No.267/83/2009-CX-8