2007 (3) TMI 544 - AT - Central Excise

Summary

Issues involved: Breach of law in availing Cenvat Credit on capital goods not used for manufacture, waiver of interest and penalty by the Appellate Authority, lack of clear finding on wrongful availing of credit, reliance on case laws by the Respondent, absence of evidence of intention to evade duty.

Judgment Summary:

Breach of Law in Availing Cenvat Credit:
The Revenue contended that the Respondent was not entitled to credit for capital goods not used for manufacture, as reversed based on Audit's findings. The Appellate Authority's waiver of interest and penalty was deemed unnecessary by the Revenue.

Waiver of Interest and Penalty:
The Respondent's counsel argued that their conduct was not questionable, and no clear finding was made on how credit was wrongfully availed or unutilized. The lower Appellate Authority rightly appreciated that without evidence of intention to evade duty, the Respondent should not be penalized merely based on book entries.

Absence of Clear Finding and Reliance on Case Laws:
Both sides had differing submissions, but it was acknowledged that the Revenue failed to demonstrate wrongful utilization of the credit entered in the books. The absence of mens rea or impeachable conduct led to the dismissal of the Revenue's appeal, with the Respondent citing relevant case laws to support their position.

Support of Lower Appellate Authority's Order:
The order of the lower appellate authority was upheld, with no new grounds presented in the Cross Objection. As there was no basis for interference, the Cross Objection was also dismissed.

This judgment highlights the importance of clear evidence in cases involving the availing of credits and the necessity of demonstrating wrongful intent to evade duty for penalization.