9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (10) TMI 827 - AT - Central ExciseWaiver of pre-deposit of amount of penalty - in-eligible CENVAT Credit- Held that - Appellant is not disputing the in-eligible CENVAT Credit availed by them and has reversed the same along with interest - to that extent order of first appellate authority is upheld and appeal of the appellant is rejected on merit. Penalty - Held that - appellant had a CENVAT Credit of more than Rs.Two Crores from the time the audit party pointed out the in-eligible CENVAT Credit of Rs.4,49,426/-. If that be so, visiting the appellant with the penalty under the provisions of Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944, seems to be unwarranted as the appellant would not have any reason to utilize the amount as he has enough balance in CENVAT - penalty imposed on the appellant is unwarranted and needs to be set aside and appeal is allowed.
Issues:
Waiver of pre-deposit of penalty under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. Eligibility of CENVAT Credit based on invoices and calculations. Dispute over penalty imposition under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. Analysis: The Stay Petition was filed seeking waiver of pre-deposit of penalty imposed by the adjudicating authority under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. The presiding judge noted that the issue was narrow and decided to dispose of the appeal itself after allowing the Stay Petition for waiver of pre-deposit of the penalty amount. The main contention revolved around the in-eligible CENVAT Credit availed by the appellant, who had reversed the amount along with interest upon being pointed out by the audit party. The appellant argued that there was no intention to avail in-eligible credit and provided evidence of substantial credit in excess of Rs.2 crores during the relevant period. Regarding the eligibility of CENVAT Credit, the appellant had availed credit based on photocopies of invoices, incorrectly calculated the credit amount, and availed 100% credit on capital goods instead of the required 50%. The appellant also failed to calculate the credit correctly for inputs received from a 100% EOU. Despite admitting the in-eligible credit availed, the appellant had reversed the amount and paid the interest. The judge upheld the order of the first appellate authority, rejecting the appeal on merit due to the appellant not disputing the in-eligible credit availed and subsequently reversed. In terms of the penalty imposition under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944, the judge found that the penalty was unwarranted. The appellant had a CENVAT Credit balance of more than Rs. Two Crores when the in-eligible credit amount was pointed out by the audit party. Given this factual position, imposing a penalty seemed unnecessary as the appellant had sufficient balance in the CENVAT account and no reason to utilize the disputed amount. Consequently, the penalty imposed by the adjudicating authority was set aside, and the appeal was allowed, overturning the decision of the first appellate authority. In conclusion, the judgment addressed the waiver of pre-deposit of penalty, eligibility of CENVAT Credit, and the unwarranted penalty imposition under the relevant provisions. The appellant's actions in reversing the in-eligible credit and the substantial credit balance were crucial factors in the decision to set aside the penalty.
|
