2009 (8) TMI 943 - AT - Central Excise

Summary

Issues:
Credit disallowed on the ground of invalid duty paying documents and penalty imposed under Section 11AC.

Analysis:
1. The appellant challenged an order disallowing credit of Rs. 68,630 taken without valid duty paying documents and imposition of penalty under Section 11AC.
2. The appellant, engaged in manufacturing excisable goods for export, claimed rebate in respect of duty paid. Revenue alleged paying higher duty to gain higher rebate using surplus Cenvat Credit. An amount of Rs. 68,630 was paid through PLA and credit was taken on the same day.
3. Appellants argued paying duty as per tariff rate instead of availing Notification benefits, hence paid appropriate duty through Cenvat Credit Account without utilizing excess credit. Amount paid through PLA for excess rebate was taken as credit.
4. Revenue contended that credit for duty paid through PLA is inadmissible, suggesting refund under Section 11B if excess duty was paid. Appellants claimed demand within the limitation period and no intent to evade duty, thus opposing penalty under Section 11AC.
5. The Tribunal found the credit taken for amount paid through PLA impermissible under the Act or Rules. Despite no challenge to paying through PLA, the credit reflected in statutory records and monthly returns. Considering these factors, penalty under Section 11AC was deemed inappropriate, and the penalty imposed was set aside.

This judgment highlights the importance of adhering to duty payment regulations and the consequences of claiming credit without valid documentation. The Tribunal's decision focused on the specific circumstances of the case, emphasizing the statutory record and limitation period in determining the penalty outcome.