2010 (10) TMI 1037 - HC - Central Excise

Summary

Issues:
Appeal by Revenue under Section 35G of Central Excise Act, 1944 against setting aside penalty under Cenvat Credit Rules, 2002 and Section 11AC of Central Excise Act, 1944.

Analysis:
The appeal was filed by the Revenue challenging the order passed by the Customs, Central Excise & Service Tax Appellate Tribunal, New Delhi, seeking to raise substantial questions of law regarding the penalty imposed under Rule 13 of the Cenvat Credit Rules, 2002 in conjunction with Section 11AC of the Central Excise Act, 1944. The main issue raised was whether the Tribunal was justified in setting aside the penalty as the party had deliberately availed and utilized inadmissible Cenvat credit on tattoos by misdeclaring them as 'packing material,' thereby contravening the provisions of the Cenvat Credit Rules. Another question was raised regarding the setting aside of the penalty when the duty had been confirmed, citing a previous decision by the Division Bench of the Tribunal.

The department had issued a show cause notice proposing to disallow Cenvat credit availed by the assessee and imposing a penalty. The Adjudicating Authority raised a demand for duty and imposed a penalty. Upon appeal, the Tribunal upheld the duty demand but set aside the penalty, noting that the assessee had not intentionally evaded duty. The Tribunal's decision was based on a previous order in a similar case involving the same assessee. The appeal against this decision was dismissed by the Court, indicating consistency in the approach taken by the Tribunal.

During the hearing, the learned counsel for the appellant presented arguments. The Court, considering the dismissal of the appeal against an identical order involving the same assessee, concluded that no substantial question of law arose for consideration. Consequently, the Court dismissed the appeal filed by the Revenue, maintaining consistency with its previous decisions and upholding the Tribunal's decision to set aside the penalty while confirming the duty demand.

This comprehensive analysis of the judgment highlights the legal issues, procedural history, arguments presented, and the final decision rendered by the Court, providing a detailed understanding of the case and its implications under the Central Excise Act, 1944 and the Cenvat Credit Rules, 2002.