𝗖𝗘𝗦𝗧𝗔𝗧 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗖𝗘𝗡𝗩𝗔𝗧 𝗖𝗿𝗲𝗱𝗶𝘁 𝗮𝗻𝗱 𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 📢 The bench of CESTAT stated:

Interest liability on reversal of proportionate credit immediately after audit observation cannot be dropped unless it is paid along with interest as per law.

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: Motorola Mobility India Pvt. Ltd. 𝗜𝘀𝘀𝘂𝗲: Wrongly claimed credit on ineligible services and the subsequent reversal of this credit.

𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀: Motorola Mobility improperly claimed CENVAT credit on exempt services but reversed it before the show-cause notice, leading to the interest demand being dropped.

⚖️ 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: Proportionate credit payment under Rule 6(3A) CCR 2004 requires interest; Tribunal upheld service tax demand, correcting the Commissioner's error.

𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 30 April 2024 𝗣𝗮𝗿𝘁𝗶𝗲𝘀: Commissioner of Central Tax vs. M/s. Motorola Mobility India Pvt Ltd 𝗖𝗮𝘀𝗲 𝗡𝗼: Service Tax Appeal No. 21228 of 2018

📜 This ruling clarifies that interest on reversed CENVAT credit must be paid according to the specified rules and cannot be dropped merely due to sufficient balance in the account. #CESTAT #CENVATCredit #LegalUpdate #arr4nirc