2009 (6) TMI 723 - AT - Central Excise

Summary

Issues:
Whether penalty under Rule 15 of the CENVAT Credit Rules, 2004 is liable to be imposed on the assessee.

Analysis:
The judgment revolves around the question of imposing a penalty on the assessee under Rule 15 of the CENVAT Credit Rules, 2004. The lower appellate authority confirmed a duty demand but vacated the penalty imposed by the original authority. The issue stemmed from the utilization of CENVAT credit on duty paid for furnace oil used in electricity generation, partially for manufacturing excisable goods and partly for lighting purposes outside the factory. The Revenue appealed seeking restoration of the penalty.

The Tribunal considered arguments from both sides. The appellant contended that adverse decisions by the Tribunal and High Court against the assessee indicated wrongful availment of CENVAT credit to evade duty payment. Conversely, the respondent's counsel highlighted the assessee's consistent challenge of these decisions, including moving to the Supreme Court, indicating a genuine belief in the admissibility of the credit. Notably, the Supreme Court dismissed the assessee's SLP in April 2008, suggesting ongoing litigation till that date, supporting the view that the credit availment was not malicious.

Crucially, the judgment emphasized that there was no assertion of mandatory penalty imposition under Rule 15 of the CENVAT Credit Rules, 2004 or Rule 25 of the Central Excise Rules, 2002 in the current circumstances. Ultimately, the appeal was dismissed, affirming the lower appellate authority's decision to vacate the penalty. This comprehensive analysis underscores the importance of continuous legal challenges and the absence of mandatory penalty provisions in the case at hand.