2017 (1) TMI 1538 - AT - Central Excise

Rectification of mistake - submissions of the applicant are that vide paragraph 16 in the final order only duty/Cenvat credit demand of ₹ 54,096/- along with interest and equivalent penalty is upheld and the remaining duty/Cenvat credit demand along with interest and equivalent penalty is set aside - Held that - the final order dated 20-3-2015 passed by this Tribunal is amended to the extent for inserting paragraph 17 in this regard which reads as The appeal filed by Shri K.K. Maheshwari is allowed and the impugned order to that extent is set aside - ROM application allowed.

Summary

Issues: Rectification of mistake in the Final Order, Personal penalty imposed on Director

The judgment involves the rectification of a mistake in the Final Order passed by the Appellate Tribunal CESTAT NEW DELHI. The Tribunal disposed of two appeals filed by a company and its Director, but no findings were recorded regarding the personal penalty imposed on the Director. The applicant argued that the Director had no role in the inadvertent Cenvat credit taken by the company and that the penalty should not be imposed on him. The Tribunal considered Rule 26 of the Central Excise Rules, 2002, which requires awareness of the violation for penalty imposition. Since the Director was not aware of the wrongful Cenvat credit and the amount was reversed upon discovery, the penalty was deemed unjust. Consequently, the appeal by the Director was allowed, and the impugned order was set aside to that extent. The Final Order was amended to reflect this decision, and both miscellaneous applications filed by the appellant were allowed.

In the judgment, the Tribunal addressed the issue of rectifying a mistake in the Final Order and the imposition of a personal penalty on the Director of the company. The Tribunal found an error in the order as no observations were made regarding the penalty imposed on the Director. The applicant contended that the Director had no involvement in the inadvertent Cenvat credit taken by the company and that the penalty was unjust. The Tribunal considered the provisions of Rule 26 of the Central Excise Rules, 2002, which require awareness of the violation for penalty imposition. Since the Director was unaware of the wrongful credit and the amount was reversed upon discovery, the penalty was deemed unwarranted. As a result, the appeal by the Director was allowed, and the impugned order was set aside to that extent. The Final Order was amended accordingly, and both miscellaneous applications filed by the appellant were allowed.