2015 (12) TMI 816 - AT - Service Tax

Confiscation of capital goods - Improper availment of CENVAT Credit - Held that - respondent assessee had availed Cenvat credit of the duty paid by the manufacturer. We also find the provisions of Rule 15 on which reliance has been placed is also not applicable inasmuch, that against the very same Order-in-Original the assessee respondent was in appeal before the Bench and the Bench vide its final order 2015 (4) TMI 395 - CESTAT MUMBAI , has upheld the ineligibility to avail Cenvat credit within the period of limitation and set aside the demands raised beyond the period of limitation. It is also seen that the Bench had set aside the penalties imposed on all the appellants therein and more specifically the respondent in this case. When the main appellant s case itself is decided by setting aside the extended period of limitation and the penalties imposed, holding that this could be an issue of interpretation, the question of confiscation of the capital goods does not arise. - Decided against Revenue.

Summary

Issues:
Revenue's appeal against Order-in-Original No. 12/STC-1/BR/10-11 dated 7-6-2010 regarding the confiscation of capital goods on which Cenvat credit was improperly availed.

Analysis:
The appeal was filed by the Revenue against an Order-in-Original dated 7-6-2010. The Revenue contended that the Adjudicating Authority did not confiscate the capital goods on which Cenvat credit was improperly availed by the respondent assessee. The Revenue argued that since the credit was wrongly taken due to misdeclaration with the intention to evade service tax, the capital goods should have been confiscated. However, it was found that the capital goods in question had duty paid by the manufacturer, and the respondent had availed Cenvat credit of the duty paid. The provisions of Rule 15, which the Revenue relied upon, were deemed inapplicable. Additionally, a previous order by the Bench had upheld the ineligibility to avail Cenvat credit within the period of limitation and set aside demands raised beyond the limitation period. The penalties imposed were also set aside, indicating that the issue could be one of interpretation, making confiscation unnecessary.

The Tribunal held that the impugned order was correct and legal, not warranting any interference. The appeal filed by the Revenue was rejected. The decision was based on the fact that the capital goods had duty paid by the manufacturer, and the previous order by the Bench had already addressed the issue of ineligibility to avail Cenvat credit. The Tribunal concluded that since the penalties were set aside and the issue could be related to interpretation, confiscation of the capital goods was not necessary in this case.

This comprehensive analysis of the judgment highlights the arguments presented by the Revenue, the findings of the Tribunal regarding the duty paid on the capital goods, the applicability of Rule 15, and the previous order by the Bench setting aside penalties and addressing the issue of ineligibility to avail Cenvat credit. The decision to reject the Revenue's appeal was based on these key factors, emphasizing the legal and factual aspects considered by the Tribunal in arriving at its conclusion.