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2015 (12) TMI 1100 - AT - Central ExciseDemand of CENVAT Credit - Penalty under Rule 15 of the Cenvat Credit Rules 1994 read with Section 11AC - Held that - Appellant had wrongly and prematurely availed and utilized the Cenvat Credit during the period from Sept. 2006 to March 2007. The main contention of the Learned Advocate is that they have reversed credit alongwith interest. I find that it was a regular practice of the appellant for 6 months of excess availment of the Cenvat Credit, even which was reversed with interest, the appellant is liable to pay penalty for contravention of the Rules. It is noted that the Adjudicating Authority imposed penalty under Rule 15 of the Rules read with Section 11AC of the Act which was modified to ₹ 5,00,000/-. The Revenue has not filed any appeal against such modification. Thus, it is clear that there is no suppression of fact with the intent to evade payment of duty - Decided partly against assessee.
Issues: Reduction of penalty under Rule 15 of the Cenvat Credit Rules 1994 read with Section 11AC of the Central Excise Act 2004.
The judgment in the case involved a dispute regarding the imposition of a penalty under Rule 15 of the Cenvat Credit Rules 1994 read with Section 11AC of the Central Excise Act 2004. The appellant had admitted to not contesting the demand for Cenvat Credit along with interest, which they had already paid before the show cause notice was issued. The Adjudicating Authority had initially imposed a penalty equal to the duty amount, but the Commissioner (Appeals) reduced it to Rs. 5,00,000. The appellant argued that the penalty reduction was not justified, while the Revenue contended that the penalty was warranted due to the appellant's habitual offense of taking excess credit. The Tribunal noted that the appellant had wrongly availed and utilized Cenvat Credit over a period of six months, even though they had reversed the excess credit with interest. The Tribunal agreed with the Revenue that the penalty was warranted for contravention of the rules but found the penalty amount excessive. The Tribunal upheld the impugned order but reduced the penalty to Rs. 1,50,000, considering the circumstances and the absence of an appeal from the Revenue against the penalty modification. In the judgment, the Tribunal considered the arguments presented by both sides regarding the penalty imposed under Rule 15 of the Cenvat Credit Rules 1994 read with Section 11AC of the Central Excise Act 2004. The appellant had acknowledged the payment of Cenvat Credit along with interest before the issuance of the show cause notice. The Adjudicating Authority had initially imposed a penalty equal to the duty amount, which was subsequently reduced to Rs. 5,00,000 by the Commissioner (Appeals). The Tribunal observed that although the appellant had rectified the excess credit availed and utilized over six months, they were still liable for penalty due to the contravention of rules. However, considering the circumstances and the absence of an appeal from the Revenue against the penalty modification, the Tribunal deemed the original penalty amount excessive and reduced it to Rs. 1,50,000. The Tribunal's judgment centered on the penalty imposed under Rule 15 of the Cenvat Credit Rules 1994 in conjunction with Section 11AC of the Central Excise Act 2004. The appellant had accepted the demand for Cenvat Credit along with interest, which they had already paid before the show cause notice was issued. The Adjudicating Authority had levied a penalty equal to the duty amount, which was later reduced to Rs. 5,00,000 by the Commissioner (Appeals). The Tribunal agreed with the Revenue that the penalty was warranted due to the appellant's habitual offense of incorrectly availing Cenvat Credit. Despite the appellant's rectification of the excess credit with interest, the Tribunal maintained that a penalty was justified for the rule violation. However, considering the circumstances and the absence of an appeal from the Revenue against the penalty modification, the Tribunal deemed the penalty amount excessive and reduced it to Rs. 1,50,000 in its final decision.
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