2018 (1) TMI 482 - AT - Central Excise

Penalties u/s 11AC read with Rule 15 (2) of the CCR, 2004 - Cenvat Credit availed on SAD - Held that - at the time of clearance of goods the appellant paid excess CVD thereon. If an assessee is paying excess duty, and could not pay the duty due to the failure in their system cannot attribute that assesee was having malafide intentions not to pay duty. In that circumstances, the content of malafides are missing - penalties set aside. The appellant paid excess CVD at the time of clearance of goods, the same is required to be adjusted against the short payment of SAD made by the appellant along with interest. Therefore, for the calculation purpose the only, the matter is consigned to the adjudicating authority to find out how much amount on account of SAD was payable by the appellant and how much excess of CVD has been paid by the appellant at the time of clearance of the goods. Appeal allowed by way of remand.

Summary

Issues:
Penalties imposed under Section 11AC read with Rule 15 (2) of the Cenvat Credit Rules, 2004.

Analysis:
The appellant contested penalties imposed on them for inadvertently not paying the Cenvat Credit of SAD availed on imported goods, despite paying CVD. The Department initiated proceedings demanding duty for the Cenvat Credit availed on SAD, along with interest and penalties. The appellant argued that the failure to pay SAD was a bonafide mistake due to software issues, and they had already paid the CVD. The appellant claimed there was no malafide intention to evade payment. The Revenue, however, supported the penalties imposed.

Upon hearing both parties, the Tribunal considered whether penalties under Rule 15 (2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Act could be imposed. It was noted that the appellant had paid excess CVD at the time of clearance, indicating no malafide intentions to evade duty payment. As malafides were absent, the penalty was set aside. Additionally, the excess CVD paid was to be adjusted against the short payment of SAD, with the matter remanded to the adjudicating authority for reconciliation.

In conclusion, the Tribunal disposed of the appeal by remand, directing the appellant to pay any reconciled demand on account of SAD along with interest, or closing the matter if no demand was found payable.