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Facts –

The Appellant, Deep Industries Limited, availing Cenvat Credit on input services and Capital Goods under Cenvat Credit Rules, 2004. Appellant had received different capital goods on which duty of excise was paid.
As per the Rule 4(2)(a) of Cenvat Credit Rules 2004 they are eligible for credit of 50% during the year 2009-10. However, appellant had taken 100% credit on capital goods in the year 2009-10 itself.
Therefore, a Show Cause Notice dtd. 21.12.2010 was issued for recovery of interest and for imposition of penalty under Rule 15 of Cenvat Credit Rules 2004 read with Section 78 of the Finance Act, 1994.

Issue –

Whether the appellant is liable to pay interest on the cenvat credit erroneously taken?

Order –

The Tribunal observed that the submission of the Learned Counsel for the Appellant that since the Appellant had not utilized the Cenvat credit and thus Rule14 of the Cenvat Credit Rules was not attracted, is ex facie contrary to the principles of law laid down by the Hon’ble Supreme Court in the case of Union of India v. Ind-Swift Laboratories Ltd.
The Tribunal do not find merit in the contentions raised in the appeal that mere availment of Cenvat credit without its utilisation of the same will not attract interest at appropriate rate under Rule 14 of Cenvat Credit Rules, 2004 as was in force during the relevant time.
As regard the imposition of penalty the Ld. Commissioner after considering all the facts rightly extended the benefits of waiver of penalty to the appellant. However, the said waiver of the penalty shall be subject to payment of interest of Rs 84,460/- by the Appellant within 30 days of receipts of this order.

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