2007 (5) TMI 416 - AT - Central Excise

Summary

Issues involved: Department appeal against Commissioner (Appeals) order regarding Cenvat credit taken by the respondent company.

Summary:
The Department appealed against the Commissioner (Appeals) order concerning the Cenvat credit taken by the respondent company. The respondent company had initially declared a stock of grey fabrics and took Cenvat credit, but upon verification, it was found that they had taken excess credit. The Asstt. Commissioner confirmed the excess credit taken and demanded interest but did not impose a penalty. The Commissioner (Appeals) also held that no penalty could be imposed under Rule 13 of Cenvat Credit Rules. The Department argued that a previous judgment had been overruled by the Hon'ble Punjab & Haryana High Court. The Tribunal found that while the credit had been wrongly taken, there was no deliberate act to evade tax, fraud, misstatement, or suppression of facts. The respondent had rectified the mistake upon discovery and had not availed any undue benefit. Therefore, the original authority's decision not to impose a penalty was legally correct, and the Commissioner (Appeals) upheld this decision. Consequently, the Commissioner (Appeals)'s order was deemed reasonable, and the appeal by the department was dismissed.