Order Date – 01 February 2023

Parties: Sri Venkateshwara Bhakti Channel Vs The Commissioner of Central Excise Customs & Service Tax Tirupathi

Facts –

• The Appellant, Sri Venkateshwara Bhakti Channel, was engaged in advertisement services. It availed CENVAT credit on several input services which were not input services for the advertisement services.
• On being pointed out by the audit, the appellant reversed the CENVAT credit on 06.12.2011. However, it had not paid the interest on the irregularly availed CENVAT credit.

Issue –

• Whether the appellant is required to pay interest on irregularly availed CENVAT credit?

Order –

• The Tribunal held that the Rule 14 of CCR provided for interest where CENVAT credit was availed or it was utilized. The Hon’ble Supreme Court has interpreted this clause in the case of Indswift Laboratories in this manner and has clearly held that the High Court had attempted erroneously to read down the provisions by way of substituting the word ‘OR’ by “AND’ so as to give relief to the assessee.
• Department served letters on 31.03.2012 to the Appellant along with a calculation sheet meets this requirement by issuing a notice. It is also pointed out that the appellant has fully availed the opportunity and put forth its defence as to why interest should not be paid through its letters dated 3.5.2012 and 1.6.2012. Therefore, the argument of the appellant that no show-cause notice was issued for recovery of interest will not sustain.
• If a demand has to be issued only for amount of interest, it has to be quantified. And such quantification is possible only after the date of availment of CENVAT credit and the date of reversal are known. A letter seeking payment of interest was issued within four months. Before it cannot be said to be time barred.
• Hence the appeal is dismissed.