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Cenvat credit wronlgy taken and utilised

EXICSE (Legacy) 1740 views 12 replies

Dears Sir,

this is most urgent

Cenvat Credit Wongly availment and utilied . we have reversed wrong cenvat credit agst the duty payment , how can paid the reversed cenvat with interest.

Thanks,

Sandeep Maurya

Replies (12)

if cenvat credit is wrongly availed and utilised and on your own motion you reverse it in the next return there is no question of penalty ,interest etc.But if the departments finds accordingly and ask you to reverse during the excise audit then there are chances of levy of penalty interest etc

You need to reverse the cenvat credit with interest of 18% per annum if you have utilise the cenvat credit after taken. 

If the credif is wrongly taken and utilized then the same along with interest shall be paid. As interest is compensatory in nature.Refer section 14 of CCR,2004 read with section 11AA of CER,2002.

Originally posted by : sandeep
Dears Sir,

this is most urgent

Cenvat Credit Wongly availment and utilied . we have reversed wrong cenvat credit agst the duty payment , how can paid the reversed cenvat with interest.

Thanks,

Sandeep Maurya

Interest shall be levied from 5th of subsequent month of date of availment @ 18% 

If cenvat credit is wrongly availed and not utilised it. Further we have reversed the wrongly availed duty. Did we have to pay penaly and interest?

Dear Ashok Ji,

Interest and penalty will not be applicable if you have reverse the same before utilisation. 

Arunji Have U any circular or notifivatipn in this regard?

In Emmllen Biotech Vs. CCE 2004(163) ELT 172 (CESTAT), it was held that if cenvat credit wrongly taken is reversed before issue of show cause notice, interest is not applicable. Till 1.4.2012, rule 14 was using the words cenvat credit availed or utilsed. 

if reveresed before issue of show cause notice...no interest is applicable

U have to reverse the cencat credit in next return & pAy intt 18% through PLA

Dear Sandeep,

If your utilisation is more than Cenvat credit available than you have to pay Intt. 18% P.A.,

example : if you have taken cenvat credit of Rs. 50000/- in November month and opening balance is 200000/-, utilisation for nov. 70000/- and for Dec. 50000/- than total utilisation is 120000 and balance is 80000/-. it means your 50000/- is still not utilised till reversal and you are not require to pay interest, but if you utilised more than cenvat taken amount than you have to pay intt. @ 18% P.A.

Originally posted by : CA CS SUMIT GUDDEWAL
if reveresed before issue of show cause notice...no interest is applicable

There is no such provision. If such wrongly availed Credit is utilized then interest should be paid.See Rule 14 of CCR,2004


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