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2009 (11) TMI 947 - AT - Central ExcisePenalty u/r 15(1) of CCR - imposition on the ground of non-filing of ER-6 returns prescribed under Rule 9A of CCR, 2004 by the due date - Held that - Rule 15 of CCR under which the penalty for this contravention of Rule 9A has been imposed, does not provide for imposition of penalty for offences other than taking the Cenvat credit in respect of inputs or capital goods wrongly or in contravention of provisions of Cenvat Credit Rules. This rule does not provide penalty for any other offence and other than Rule 15 - In fact in Cenvat Credit Rule,2002, there is no provision analogous to Rule 27 of Cenvat Credit Rule which provide for imposition of penalty in the cases for contravention where no other penalty prescribed in the CER, 2002 or in the Act. The contravention for which the penalty has been imposed, is only a procedural violation and subsequently, the required return had been filed. In view of these circumstances, the impugned order imposing penalty of ₹ 50,000/- on the appellant under Rule 15 of CCR, 2004 is not sustainable - appeal allowed - decided in favor of appellant.
Issues:
Imposition of penalty under Rule 15(1) of Cenvat Credit Rules for non-filing of ER-6 returns prescribed under Rule 9A. Analysis: The appellant, a manufacturer, was required to file ER-6 return under Rule 9A of Cenvat Credit Rules, 2004. The Asstt. Commissioner imposed a penalty of Rs. 50,000 under Rule 15(1) for not filing the required return, which was upheld by the Commissioner (Appeals). The appellant challenged this penalty imposition through the present appeal. The appellant's counsel argued that Rule 15(1) does not apply to non-filing of returns under Rule 9A and that no penal provision exists in Cenvat Credit Rules apart from Rule 15. The counsel cited precedents where penalties were not imposed for procedural violations. The Departmental Representative defended the penalty imposition under Rule 27 of Central Excise Rules, stating that both Cenvat Credit Rules and Central Excise Rules were framed under the Central Excise Act. The Tribunal, after considering the arguments and records, noted that Rule 15 of Cenvat Credit Rules does not provide for penalties for offenses other than wrongly taking Cenvat credit. It was observed that Rule 27 of Central Excise Rules, which allows penalties in certain cases, does not have a counterpart in Cenvat Credit Rules. The Tribunal found the non-filing of ER-6 returns to be a procedural violation, and since the required return was eventually filed, the penalty imposition was deemed unsustainable. Consequently, the penalty of Rs. 50,000 imposed on the appellant under Rule 15 of Cenvat Credit Rules was set aside, and the appeal was allowed. This judgment clarifies that penalties under Rule 15 of Cenvat Credit Rules are specific to contraventions related to Cenvat credit on inputs or capital goods and do not extend to procedural violations like non-filing of prescribed returns. It emphasizes the absence of provisions similar to Rule 27 of Central Excise Rules in Cenvat Credit Rules for imposing penalties in cases where specific penalties are not prescribed. The Tribunal's decision underscores the importance of distinguishing between substantive contraventions and procedural lapses when imposing penalties under the relevant rules.
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