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2018 (8) TMI 1335 - AT - Central ExcisePenalty u/r 15(2) of the CCR read with Section 11AC of the CEA - Held that - Section 11AC of the Central Excise Act, 1944 will not have any application, in case of reversal of excess availed CENVAT credit, in terms of Rule 6(3)(b) of the CENVAT Credit Rules - the impugned order stands, so far as it dropped the penalty imposed on the respondent. Demand of interest for delayed reversal of CENVAT credit - Held that - Hon ble Supreme Court in the case of Union of India Vs. Ind-Swift Laboratories Ltd. 2011 (2) TMI 6 - SUPREME COURT have ruled that under the amendment provisions of Rule 14 of the CENVAT Credit Rules, 2004, the respondent-assessee is liable to pay interest, even when it had sufficient balance in the books of accounts - demand of interest upheld. Appeal allowed in part.
Issues:
1. Setting aside penalty under Rule 15(2) of CENVAT Credit Rules, 2004 and Section 11AC of Central Excise Act, 1944 by Commissioner (Appeals). 2. Condonation of delay in filing the cross appeal by the respondent. 3. Imposition of penalty on the respondent. 4. Demand of interest for delayed reversal of CENVAT credit. Analysis: Issue 1: Setting aside penalty under Rule 15(2) of CENVAT Credit Rules, 2004 and Section 11AC of Central Excise Act, 1944 by Commissioner (Appeals) The Revenue challenged the impugned order arguing that the penalty imposed by the Commissioner (Appeals) should not have been set aside. The Tribunal noted that the Commissioner (Appeals) based the decision on a judgment of the Hon'ble Punjab & Haryana High Court, which held that Section 11AC of the Central Excise Act, 1944 does not apply in cases of reversal of excess availed CENVAT credit under Rule 6(3)(b) of the CENVAT Credit Rules. Since the judgment of the Hon'ble High Court was not stayed or overruled by the Hon'ble Apex Court, the Tribunal found it binding and upheld the decision to drop the penalty imposed on the respondent. Issue 2: Condonation of delay in filing the cross appeal by the respondent The respondent filed a cross appeal with a request for condonation of a 6-day delay. The Tribunal considered the negligible delay and the reason provided by the respondent as reasonable. Consequently, the delay in filing the cross appeal was condoned, and both the appeal by Revenue and the cross appeal by the respondent were heard together. Issue 3: Imposition of penalty on the respondent The Tribunal, in line with the judgment of the Hon'ble Punjab & Haryana High Court, upheld the decision to drop the penalty imposed on the respondent under Rule 15(2) of the CENVAT Credit Rules, 2004 and Section 11AC of the Central Excise Act, 1944. The Tribunal found the judgment of the High Court to have a binding effect and therefore dismissed the appeal filed by Revenue. Issue 4: Demand of interest for delayed reversal of CENVAT credit Regarding the demand of interest for delayed reversal of CENVAT credit, the Tribunal referred to a judgment of the Hon'ble Bombay High Court, which held that an assessee is liable to pay interest under Rule 14 of the CENVAT Credit Rules, 2004, even if there was a sufficient balance in the books of accounts. Relying on this judgment, the Tribunal concluded that the interest demand confirmed by the authorities on the respondent was proper and justified. Consequently, the cross appeal filed by the respondent was dismissed. In conclusion, the Tribunal dismissed the appeal filed by Revenue and also dismissed the cross appeal filed by the respondent based on the detailed analysis and application of relevant legal principles and judgments cited during the proceedings.
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