2019 (6) TMI 6 - AT - Central Excise

Levy of penalty - Rule 15 (2) of CER - Section 11 AC of the Central Excise Act - wrong availment of Cenvat credit - HELD THAT - Revenue has miserably failed to justify, in the first place, the invocation of extended period of limitation. When there is an agreement that there is no suppression etc., then, the same will equally hold good for invoking extended period of limitation as well, since the ingredients/requirements of law for invoking larger period wholly rests on suppression, etc. So, viewed in this context, what is not applicable to one cannot be made applicable to another when there is no suppression for levying penalty, there can be no case for suppression for invoking larger period also. This assumes more relevance and importance especially when there was an audit in September 2009. I accept the contentions of the assessee as to the non-justification in invoking the larger period and I am therefore constrained to hold that the proceedings in the above appeal is badly hit by limitation since there is no case made out by the Revenue to justify the invocation of extended period. This being so, the impugned order cannot be sustained - appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged short payment of excise duty, wrongful availment of Cenvat credit, imposition of penalty, invocation of extended period of limitation.

The judgment by the Appellate Tribunal CESTAT Chennai dealt with a case where a Show Cause Notice was issued alleging a short payment of excise duty by the appellants for a specific period. The Order-in-Original observed a shortfall in payment, which was later challenged by the Revenue before the first appellate authority. The Commissioner (Appeals) upheld the alleged wrongful availment of Cenvat credit by the appellants, contrary to the provisions of the Central Excise Rules, 2002. However, the Commissioner did not find incriminating circumstances to impose a penalty under the Cenvat Credit Rules, 2004. The main point of difference between the original authority and the First Appellate Authority was whether the short payment of duty was required to be paid only in cash. The Commissioner (Appeals) found the appellants liable to pay the short duty along with interest due to lack of evidence regarding the payment in PLA. The first appellate authority opined that there was no case for levying a penalty under Rule 15 (2) as there was no suppression or fraud involved. The judgment highlighted the importance of suppression or fraud for invoking a larger period of limitation and emphasized that the invocation of a larger period cannot be routine or automatic. The Tribunal accepted the contentions of the assessee regarding the non-justification of invoking the larger period and held that the proceedings were hit by limitation, thereby setting aside the impugned order and allowing the appeal with consequential benefits, if any, as per law.