2010 (10) TMI 1137 - AT - Central Excise

Summary

Issues involved: Denial of Cenvat Credit u/s 11AC of Central Excise Act 1944, confusion regarding penalty provision under Rule 15 (1) and Rule 15 (2) of Cenvat Credit Rules 2004.

Denial of Cenvat Credit: The appellant availed credit on a photo copy of quadruplicate copy of invoice without informing the Department about such methodology. As a result, Cenvat Credit of &8377; 11,039/- was denied with a penalty of equal amount imposed u/s 11AC of Central Excise Act 1944. The show cause notice highlighted confusion in invoking the penalty provision, leading to the matter being sent back to the Adjudicating Authority to determine the appropriate sub-rule for levy of penalty under Rule 15 (1) or Rule 15 (2) of Cenvat Credit Rules 2004. The appellant's argument for remittance of the matter was supported by a Division Bench decision in a similar case.

Confusion regarding Penalty Provision: The law does not intend for an assessee to suffer under confusion when penal consequences are proposed by a show cause notice. The Tribunal observed that specific mandates under Rule 15 (1) and 15 (2) of Cenvat Credit Rules 2004 should be followed, and the matter was remanded to the Adjudicating Authority for a proper conclusion on the appropriate sub-rule for penalty levy. The appellant's request for dispensation of pre-deposit was granted, and the Adjudicating Authority was directed to provide a fair opportunity of hearing and pass a reasoned order.

Disposition: The Stay Application and appeal were disposed of, with the matter remanded for further consideration by the Adjudicating Authority.