9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (11) TMI 485 - AT - Central ExciseRefund of penalty - Imposition of Penalty for Evasion of Duty - Held that - Following the decision of court in case of Union of India Versus M/s Rajasthan Spinning & Weaving Mills AND Commissioner of Customs 2009 (5) TMI 15 - SUPREME COURT OF INDIA Once the conditions specified u/s 11AC of the Central Excise Act are satisfied, penalty becomes mandatory and there is no scope of discretionary power. In the present case appellants were importing inputs and availing the CENVAT Credit of CVD amount is paid. The credit of CVD amount paid by the 100% EOU was availed on the strength of the invoices issued by 100% EOU. Whereas there is restriction for taking credit in respect of the inputs received from 100% EOU. This mistake was pointed out by the Revenue and the duty and interest was paid.It cannot be said that there was willful mis-statement or suppression of facts with intent to evade payment of duty as required for imposition of penalty under Section 11AC of the Act - final order of the Tribunal reducing the penalty to Rs. 1 lakh, which has been already paid by the appellants,is not challenged by the appellant. Therefore, appellants are not entitled for refund of the penalty already paid by them.
Issues:
- Applicability of Rule 3(6)(a) of the Cenvat Credit Rules, 2002 - Imposition of penalty under Rule 13(2) of the Cenvat Credit Rules, 2002 - Willful intention to evade payment of duty - Validity of show-cause notice invoking Rule 13(2) post its omission - Interpretation of penalty provisions under Section 11AC of the Central Excise Act Analysis: Applicability of Rule 3(6)(a) of the Cenvat Credit Rules, 2002: The case involved the appellants availing CENVAT Credit on inputs purchased from a 100% EOU, contrary to the restrictions outlined in Rule 3(6)(a) of the Cenvat Credit Rules, 2002. The appellants imported inputs and claimed credit on the CVD amount paid, leading to a dispute regarding the correct application of the rule. Imposition of penalty under Rule 13(2) of the Cenvat Credit Rules, 2002: A show-cause notice was issued for the appropriation of the amount paid along with interest and for the imposition of penalty under Rule 13(2) of the Cenvat Credit Rules, 2002. The adjudicating authority confirmed the demand and imposed a penalty, which was later reduced by the Tribunal but challenged by the Revenue. Willful intention to evade payment of duty: The Revenue argued that there was a willful intention to evade duty, citing the Supreme Court's decision in a relevant case. However, the appellants contended that there was no deliberate wrongdoing, as the excess credit was reversed upon detection by the Audit Party. Validity of show-cause notice invoking Rule 13(2) post its omission: The appellants raised a valid point regarding the omission of Rule 13(2) of the Cenvat Credit Rules through a notification dated 1.3.2003, questioning the sustainability of the penalty imposed based on a provision that was no longer in effect at the time of the notice. Interpretation of penalty provisions under Section 11AC of the Central Excise Act: The Tribunal analyzed the penalty provisions under Section 11AC of the Central Excise Act in light of the Supreme Court's interpretation in a specific case. It was emphasized that the imposition of penalty under this section requires a deliberate act of deception by the assessee with the intent to evade duty, which was found lacking in the present case. In conclusion, the Tribunal found that there was no willful misstatement or suppression of facts with intent to evade duty in the appellants' actions. Moreover, the invocation of Rule 13(2) post its omission raised concerns about the validity of the penalty imposed. The Tribunal upheld the reduction of the penalty to Rs. 1 lakh and determined that the appellants were not entitled to a refund of the penalty already paid.
|
