2012 (12) TMI 931 - AT - Central Excise

Recovery of excess credit taken - Interest - - Held that - that this is a case of mistake rather than any action with intention to evade payment of duty especially in view of the fact that the credit taken was not utilized. Further I notice that the majority of instances happened in one month that is March 2009 when as per pleading they had some change in the staff. Therefore, I accept the pleading of the appellant for waiver of penalty - Decided in favour of assessee.

Summary

Issues:
1. Double CENVAT credit taken based on the same set of documents.
2. Recovery of excess CENVAT credit along with interest and penalty.
3. Admissibility of appeal only in respect of the penalty imposed.
4. Whether the mistake was intentional or due to clerical error.
5. Waiver of penalty based on bonafides and absence of intention to evade payment of duty.

Analysis:
1. The appellant had taken CENVAT credit twice based on the same set of documents, resulting in the detection of double credit during an audit. The excess credit was immediately reversed, but interest on the amount was not paid, leading to a show-cause notice for recovery of the excess credit, interest, and penalty under relevant rules and acts.

2. The adjudication confirmed an amount along with interest and penalty equal to the said amount. The appeal was primarily focused on challenging the penalty imposed, as the duty and interest had already been paid by the appellant.

3. The appellant argued that the mistake was due to a clerical error and a change in staff, emphasizing that there was no intention to evade payment of excise duty. They highlighted that the credit taken was not utilized, and they had a significant amount of CENVAT credit in their account during the relevant period.

4. The appellant cited previous decisions where interest need not be paid unless the wrong credit was utilized, but upon being made aware of a relevant apex court decision, they paid the interest as well. The appellant sought the waiver of penalties, asserting their bonafides and clarifying that they were not contesting the duty demand.

5. The Revenue opposed the waiver, pointing out that similar mistakes had occurred on multiple occasions, suggesting an intentional pattern of behavior. However, the Tribunal found the appellant's explanation credible, considering it a case of mistake rather than intentional evasion, especially since the credit was not utilized. The Tribunal granted the waiver of the penalty, accepting the appellant's plea, and allowed the appeal accordingly, disposing of the stay petition and appeal.