The Ahmedabad Bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) in the case of Lyka Labs Ltd Versus Commissioner held that the issue of time bar can be entertained in the rectification of a mistake application.
The bench of Ramesh Nair (Judicial Member) and C L Mahar (Technical Member) has observed that the appellant has a prima facie case of time bar, however, since the appellant are not contesting the payment of Cenvat Credit of Rs.60,15,116/- paid under Rule 6(3) of Cenvat Credit Rules, 2004, the said payment was mentioned, however it is clear that the entire case was time barred and for this reason only, the entire penalty was also set aside.
The bench observed that once the demand itself is hit by time bar, consequential interest is also not payable.
The appellant/assessee, Lyka Labs have made a detailed submission and ground on limitation for the purpose of setting aside the penalty and interest. However, the Tribunal in the order maintained the interest.
The assessee submitted that there is no suppression of fact and considering the said position, penalty was also set aside. Though, the appellant has reversed the Cenvat credit but since the entire demand is time barred, the interest is not chargeable. Therefore, the order needs rectification. the issue of time bar can be entertained in the rectification of a mistake application.
The tribunal has demanded the interest on the payment of Cenvat Credit of Rs.60,15,116 the order bears an error apparent on record which needs to be rectified.
The tribunal while allowing the ROM application held that appellant is not liable for payment of interest on the amount of Cenvat Credit of Rs.60,15,116. The demand of interest is set aside.
Case Details
Case Title: Lyka Labs Ltd Versus Commissioner of C.E-Bharuch
Case No.: Excise Appeal No. 11883 of 2015-DB
Date: 10.12.2024
Counsel For Appellant: Shailesh P Sheth
Counsel For Respondent: Rajesh K Agarwal
