2017 (11) TMI 1569 - AT - Central Excise

Penalty - CENVAT credit - credit availed twice - case of appellant is that availment of CENVAT credit in appellants factory being voluminous the error of availing credit twice over is a clerical error - Held that - the reasoning given by the First Appellate Authority is correct and pertinent to the issue in hand as regards imposition of penalty as appellant is an unit in the organized sector - First appellate authority has held that neither in the original proceedings nor in the appeal proceedings the appellant has explained with any reasonable clarity as to how such credit came to be taken by them which act in my view was against all accounting norms. In the absence of a valid clarification on such amount so want only taken by them there is no basis on which they could claim innocence and therefore there is no reason on my part to examine whether there were any bonafide grounds on their part in taking credit irregularly in excess of the eligible amount as per the documents. Penalty upheld - appeal dismissed - decided against appellant.

Summary

Issues:
- Availment of ineligible CENVAT credit
- Reversal of credit and penalties imposed

Analysis:
- The appeal challenged the Order-in-Appeal regarding the availment of ineligible CENVAT credit, its reversal, and the penalties imposed. The appellant availed CENVAT credit twice on the same documents during a specific period. The appellant admitted the irregularity and paid the due amount along with interest. The appellant claimed the double availment was a clerical error, not intentional, and sought leniency in penalty imposition citing previous decisions. The Departmental Representative supported the lower authorities' findings.

- The Tribunal found that the appellant indeed availed CENVAT credit twice over on the same documents, which was rectified by payment of the due amount. The main issue was the penalty imposed on the appellant. The First Appellate Authority justified the penalty based on the deliberate excess credit taken by the appellant over a period of time, despite the error being pointed out by audit officers. The Tribunal concurred with the Authority's reasoning, emphasizing the seriousness of the appellant's actions in taking ineligible credit. The Tribunal noted the lack of valid explanations or bonafide grounds for the excessive credit availed, considering it intentional and against accounting norms. The Tribunal upheld the penalty under Section 11AC of the Central Excise Act, 1944, and Rule 15(2) of CENVAT Credit Rules, 2004, dismissing the appellant's appeal.

- The Tribunal rejected the appellant's reliance on previous case laws as the facts of those cases differed. The Tribunal concluded that the penalty imposed was lawful given the circumstances and the findings of intentional offense on record. Therefore, the appeal was dismissed, and the penalty equal to the irregular credit availed by the appellant was upheld as per the law and the established offense.