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2016 (11) TMI 1474 - AT - Central ExciseCENVAT credit on Additional duty of Customs - removal of imported goods to other unit - Held that - The appellant had taken a plea of bonafide belief. But they have not produced any material evidence in support of their contention, therefore, the lower authorities rightly invoked Section 11AC of the Act. However, the Adjudicating Authority had not given any option to pay penalty of 25% of duty, as provided under Section 11AC of the Act. The appellant is entitled for an option to pay penalty of 25% of duty within the specified period - appeal allowed in part.
Issues:
1. Liability of additional duty of Customs on imported ball bearings removed to a different unit within the country. 2. Applicability of penalty under Rule 15(2) of CCR, 2004 read with Section 11AC of the Central Excise Act, 1944. Issue 1: Liability of additional duty of Customs on imported ball bearings removed to a different unit within the country The appellant imported a quantity of ball bearings and subsequently removed a portion to its Faridabad unit. The Department pointed out that additional duty of Customs was payable on the bearings removed. The appellant, under a bonafide belief that duty was not payable for removal within the country, did not pay the additional duty of excise availed as CENVAT Credit. A show cause notice was issued, and recovery of the credit amount was confirmed. The appellant contended their bonafide belief but failed to provide material evidence. The Adjudicating Authority upheld the demand of duty, interest, and penalty, noting suppression of facts and willful contravention of the law. However, the appellant was not given the option to pay a reduced penalty of 25% of the duty as per Section 11AC of the Act. Issue 2: Applicability of penalty under Rule 15(2) of CCR, 2004 read with Section 11AC of the Central Excise Act, 1944 The Commissioner (Appeal) found suppression of facts and willful contravention of the law by the appellant. The appellant's plea of bonafide belief was considered but lacked supporting material evidence. The Adjudicating Authority did not offer the appellant the option to pay a reduced penalty of 25% of the duty as per Section 11AC of the Act. The Tribunal upheld the demand of duty and interest, but allowed the appeal in part. The appellant was directed to pay a reduced penalty of 25% of the duty within 30 days of the order's communication. In conclusion, the Tribunal upheld the liability of additional duty of Customs on the imported ball bearings removed to a different unit within the country. The appellant's plea of bonafide belief was not substantiated with evidence, leading to the imposition of penalty under Rule 15(2) of CCR, 2004 read with Section 11AC of the Central Excise Act, 1944. The appellant was granted the option to pay a reduced penalty of 25% of the duty within a specified period.
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