2011 (3) TMI 836 - AT - Central Excise

Interest and penalty - Wrongly availed modvat credit, which was subsequently reversed - assessee submits that in the first adjudication order, the Assistant Commissioner had only confirmed the interest - No penalty was imposed - Revenue was not aggrieved with the said order and did not file any appeal - It is only the appellant who took the matter in appeal before Commissioner (Appeals), who remanded the same - It is well settled principle of law that an assessee cannot be put to a worst position then what he was in, at the time of filing of the appeal - The imposition of penalty in remand proceedings by the Assistant Commissioner was not justified. Accordingly while confirming the interest portion,set aside the penalty upon the appellant - Hence, the appeal is disposed off

Summary

Issues: Interest confirmation for wrongly availed modvat credit, imposition of penalty, remand proceedings, imposition of penalty in remand proceedings

In this case, the main issue revolved around the confirmation of interest against the appellant for wrongly availed modvat credit, along with the imposition of a penalty. The appellant did not dispute the interest confirmation based on the latest law laid down by the Hon'ble Supreme Court, which stated that interest is payable from the date of taking credit. However, the appellant argued that in the initial adjudication order, only interest was confirmed, and no penalty was imposed. The matter was then appealed, and upon remand by the Commissioner (Appeals), the original adjudicating authority imposed a penalty along with confirming the interest.

During the denovo proceedings, the appellant contended that since there was no appeal by the Revenue against the initial order of non-imposition of penalty, the imposition of penalty in the remand proceedings was unjustified. The Tribunal, after considering the submissions, agreed with the appellant's argument. It was established that the Revenue did not appeal against the initial order that did not impose a penalty, and it was the appellant who appealed, leading to the remand by the Commissioner (Appeals). As per legal principles, an assessee cannot be put in a worse position than at the time of filing the appeal. Therefore, the imposition of penalty in the remand proceedings by the Assistant Commissioner was deemed unjustified.

Consequently, the Tribunal set aside the penalty imposed on the appellant while confirming the interest portion. The judgment highlighted the importance of adhering to legal principles and ensuring that the rights of the appellant are protected during the appeal process. The appeal was disposed of in favor of the appellant, emphasizing the need for procedural fairness and adherence to established legal norms in such matters.