2008 (4) TMI 623 - AT - Central Excise

Summary

Issues: Imposition of penalty under Rule 15 of the Cenvat Credit Rules, 2004 and recovery of interest on clearance of inputs/capital goods.

In this case, the Central Excise Officers visited the Appellant's factory and found a shortage of inputs during stock verification. The Manager of the Appellant admitted the shortage, attributing it to short receipt of raw materials over time. The Appellant voluntarily debited the duty amount before a show cause notice was issued. The Adjudicating Authority confirmed the recovery of credit and imposed a penalty of Rs. 10,000 under Rule 15 of the Cenvat Credit Rules, 2004, along with demanding interest under Section 11AB for not reversing the credit at the time of clearance. The Commissioner (Appeals) upheld this decision.

Upon review, the judge found that the penalty under Rule 15 of the Cenvat Credit Rules, 2004 was not justified as the Appellant had explained the shortage and voluntarily debited the duty. Additionally, regarding the recovery of interest on the clearance of inputs/capital goods, the judge referred to a previous Tribunal case and concluded that the demand for interest was not justified based on the application of fortnightly/monthly payment of duty facility under Rule 8 of the Central Excise Rules, 2004.

Consequently, the judge modified the impugned order by setting aside the imposition of penalty and interest. The appeal was disposed of with these modifications. The order was dictated and pronounced in open court on 24-4-2008.