2017 (5) TMI 1182 - AT - Central Excise

Penalty u/r 15(4) of CCR 2004 - appellant is a manufacturer - Held that - penalty u/r 15(4) is imposable only on the service provider for wrong availment of CENVAT credit - In the present case the appellant is a manufacturer also availed the credit in the status of manufacturer therefore penal provisions u/r 15(4) is not applicable to the appellant. Therefore penalty imposed u/r 15(4) read with Section 78 of FA, 1994 which is applicable to the service provider is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Rectification of mistake in the Tribunal's order regarding the imposition of penalty under Rule 15(4) of Cenvat Credit Rules, 2004.

Analysis:
The case involved an application for rectification of mistake in the Tribunal's order dated 6-1-2017. The appellant, a manufacturer, contended that the penalty under Rule 15(4) was not applicable to them as it pertains only to service providers. The Tribunal's order did not specifically address the issue of penalty under Rule 15(4). The rule specifies penalties for wrongful utilization of Cenvat credit and distinguishes between penalties for manufacturers and service providers. The Tribunal noted that the penalty under Rule 15(4) is applicable only to service providers for the wrong availment of credit. As the appellant was a manufacturer and not a service provider, the penalty under Rule 15(4) was deemed inapplicable. Consequently, the penalty imposed under Rule 15(4) read with Section 78 of the Finance Act, 1994, applicable to service providers, was set aside, and the Tribunal's order was modified accordingly. The application for rectification of mistake was disposed of on this basis.

This detailed analysis clarifies the issue of penalty imposition under Rule 15(4) of the Cenvat Credit Rules, 2004, and highlights the distinction between penalties for manufacturers and service providers based on the wrongful utilization of Cenvat credit. The Tribunal's decision was based on a careful consideration of the appellant's submissions and the relevant legal provisions, ultimately leading to the modification of the original order to reflect the correct application of penalties in this case.