2013 (12) TMI 286 - AT - Central Excise

Penalty under Rule 15(2) of CENVAT Credit Rules - Tempered documents Mis-declaration with intent to evade duty Held that - The allegation of tampering of delivery challans and showing the wrong date in the delivery challan has not at all been established - There is no clear finding that in the verification report the AC has mentioned that there was tampering - when the table itself is compared with the documents and in the absence of an extra column to show the actual date of dispatch and actual date of delivery challan in the table, it cannot be said that the Revenue has made out a case of tampering against the appellant - the credit has been reversed when the audit pointed out the same it cannot be said that there was suppression of fact or misdeclaration with intent to evade duty unless it is shown by way of statements of the concerned officers of the company or any other evidence to show that there was an intention on the part of the appellant to evade duty or to suppress facts - no investigation has been conducted as regards the manipulation of any records. There was considerable force in the argument that no penalty could have imposed under Section 11AC in the absence of determination of CENVAT credit to be reversed as per the provisions of Section 11A (2) of Central Excise Act 1944 - penalty under Rule 15(1) as well as penalty under Rule 15(2) cannot be sustained Decided in favour of assessee.

Issues:
1. Availment of CENVAT credit on capital goods sent for job work without proper documentation.
2. Imposition of penalty under Rule 15(2) of CENVAT Credit Rules 2004.
3. Allegations of tampering with delivery challans and misdeclaration of dates.
4. Absence of duty determination under Section 11A(2) for penalty imposition under Rule 15(2).
5. Setting aside of penalty under Rule 15(1) by the Commissioner (Appeals).

Analysis:
1. The case involved the appellant availing CENVAT credit on capital goods sent to a sister unit for job work without proper documentation. The Revenue observed discrepancies in the dates of dispatch and return of goods, leading to a show-cause notice for demanding the credit availed. The original adjudicating authority imposed penalties and interest, which were contested by the appellant.

2. The main issue revolved around the imposition of penalty under Rule 15(2) of CENVAT Credit Rules 2004. The appellant argued that without a formal determination of duty under Section 11A(2) of the Central Excise Act 1944, penalty under Rule 15(2) could not be justified. The appellant challenged the penalty on grounds of lack of evidence supporting the allegations and tampering of delivery challans.

3. The appellant contested the allegations of tampering with delivery challans and misdeclaration of dates. The appellant argued that there was no concrete evidence presented by the authorities to prove tampering. The lack of a clear finding on tampering and absence of additional columns in the documentation to support the allegations weakened the Revenue's case.

4. The absence of duty determination under Section 11A(2) was highlighted as a crucial factor in the imposition of penalties. The appellant argued that without a formal determination of duty to be reversed, penalties under Rule 15(2) could not be imposed. The appellant emphasized the necessity of following proper legal procedures for penalty imposition.

5. The Commissioner (Appeals) set aside the penalty under Rule 15(1), which was not challenged by the Revenue. Consequently, both penalties under Rule 15(1) and Rule 15(2) were deemed unsustainable, leading to the appeal being allowed. The interest liability was confirmed as not being in dispute, concluding the judgment.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT Bangalore showcases the issues, arguments, and conclusions surrounding the case involving CENVAT credit availed on capital goods and the subsequent penalties imposed under the CENVAT Credit Rules 2004.

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