𝗖𝗘𝗦𝗧𝗔𝗧 𝗕𝗮𝗻𝗴𝗮𝗹𝗼𝗿𝗲 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗳𝗼𝗿 𝗖𝗘𝗡𝗩𝗔𝗧 𝗖𝗿𝗲𝗱𝗶𝘁 𝗥𝗲𝘃𝗲𝗿𝘀𝗮𝗹 📢 𝗧𝗵𝗲 𝗯𝗲𝗻𝗰𝗵 𝗼𝗳 𝗖𝗘𝗦𝗧𝗔𝗧 𝗕𝗮𝗻𝗴𝗮𝗹𝗼𝗿𝗲 𝗿𝘂𝗹𝗲𝗱: Interest is payable on reversed credit, even before show-cause notice.

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: M/s. Motorola Mobility India Pvt. Ltd. 𝗜𝘀𝘀𝘂𝗲: Whether interest liability can be dropped when proportionate credit is reversed immediately after an audit observation.

⚖️ 𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀: The company was found to have wrongly claimed CENVAT credit on ineligible services. Despite reversing the credit before a show-cause notice was issued, the tribunal ruled that interest must still be paid as per the law.

📜 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: The tribunal upheld the Commissioner’s order confirming the service tax demand and ruled that interest must be paid on the reversed credit, as required by Rule 6(3A) of the Cenvat Credit Rules, 2004.

𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗣𝗮𝗿𝘁𝗶𝗲𝘀: Commissioner of Central Tax Vs M/s. Motorola Mobility India Pvt. Ltd. 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 30 April 2024

📜 This ruling emphasizes the necessity of paying interest on CENVAT credit reversals, even if they occur prior to the issuance of a show-cause notice. #CESTAT #ServiceTax #arr4nirc