2012 (12) TMI 930 - AT - Central Excise

Availment of CENVAT Credit - Non production of proper documents - Held that - I am not in agreement with the contention of the appellant that the extended period of time should not be invoked in this case because they are required to exercise due care while taking the credit. As a prudent and experienced central excise assessee the appellant would have noticed the defects but still they chose to take credit without disclosing the defects to the department. I give the appellant an option to pay 25% of the penalty within 30 days of receipt of this order for final closure of the matter. If such payment is not made, the full amount of penalty will be payable after 30 days of the receipt of the order - Decided partly in favour of assessee.

Summary

Issues involved:
1. Dispute over CENVAT credit of Rs.83,204/- lacking proper documents under Rule 9(1) of CENVAT Credit Rules, 2004.
2. Whether the demand invoking the extended period of time is time-barred.
3. Imposition of penalty equal to the duty amount under Section 11AC of the Central Excise Act without the option to pay 25% of the penalty.

Analysis:
1. The dispute in this case revolves around the CENVAT credit of Rs.83,204/- claimed by the appellant without proper documents as required by Rule 9(1) of the CENVAT Credit Rules, 2004. The appellant's counsel did not contest the inadequacy of the documents supporting the credit. The appellant's argument was centered on the demand being time-barred due to the invocation of the extended period of time.

2. The Addl. Commr. (AR) opposed the appellant's argument, emphasizing that the appellant, being an established company well-versed in Central Excise laws, knowingly utilized incomplete documents for claiming CENVAT credit. The appellant's method of reporting the credit in a consolidated manner without providing necessary details was deemed insufficient disclosure, justifying the invocation of the extended period of time for the demand.

3. The judgment rejected the appellant's contention that the extended period of time should not apply, highlighting that the appellant, as an experienced central excise assessee, should have exercised due diligence in identifying and rectifying the document defects before claiming the credit. Consequently, the demand of Rs.83,204/- was upheld. However, regarding the penalty imposed equal to the duty amount under Section 11AC of the Central Excise Act, the judgment referenced a Delhi High Court decision allowing the appellant the option to pay 25% of the penalty within 30 days for final closure of the matter.

4. Ultimately, the judgment granted the appellant the opportunity to pay 25% of the penalty within 30 days from the receipt of the order for resolution. Failure to make this payment within the stipulated time frame would result in the full penalty amount becoming payable. The appeal was disposed of with the decision to uphold the demand for Rs.83,204/- while providing the penalty payment option, concluding the case with the disposal of both the stay petition and appeal.