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2018 (1) TMI 351 - AT - Central ExciseWhether the appellant is liable for penalty under section 11AC for the offence of wrong availment of credit due to the reason that either credit was taken on value or on wrong amount in respect of 42 invoices? Held that - The nature of the wrong credit is either it was taken in respect of value instead of duty or wrong figures of duty was shown as credit in their Cenvat account. Such mistake can occur only in respect of one or two invoices - in the instant case, mistake has occurred in 42 invoices, this clearly shows gross negligence of the appellant therefore it cannot be said that there is no malafide intention on the part of the appellant merely by making payment alongwith interest before issuance of SCN appellant cannot be absolved from penalty. The department was not in a position to know about wrong availment of credit therefore repeated mistake in taking wrong credit is amount to malafide intention to avail wrong credit - penalty upheld - appeal dismissed.
Issues involved:
Whether the appellant is liable for penalty under section 11AC for wrong availment of credit due to taking credit on value or wrong amount in respect of 42 invoices. Analysis: The appellant admitted to the wrong availment of credit due to inadvertent mistake and paid the entire amount along with interest before the show cause notice was issued. The appellant argued that as per Section 11A(1)(b)(ii) of the Central Excise Act, a show cause notice was not warranted in this case. The Revenue, represented by the Superintendent (A.R.), reiterated the findings of the impugned order. The main issue to be decided was whether the penalty under Section 11AC was justified in this case. It was noted that the appellant had availed wrong credit for 42 invoices, either on value instead of duty or by showing wrong duty figures as credit in their Cenvat account. The Tribunal opined that such mistakes are expected for one or two invoices, but occurring in 42 invoices indicated gross negligence on the part of the appellant, suggesting malafide intention. The Tribunal held that making payment along with interest before the show cause notice did not absolve the appellant from penalty. The adjudicating authority found that the appellant had availed excess Cenvat credit based on an audit objection and had reversed the amount, indicating acknowledgment of the mistake. The Tribunal observed that the repeated mistakes in taking wrong credit demonstrated a malafide intention to avail such credit. It was concluded that the department was not aware of the wrong availment initially, but the appellant's actions indicated intentional misconduct. Therefore, the impugned order was upheld, and the appeal was dismissed. The judgment was pronounced on 24/11/2017.
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