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2019 (7) TMI 460 - HC - Central ExciseCENVAT Credit - MS items/iron and steel used for fabrication of goods or support structures - extended period of limitation - penalty - HELD THAT - The remand of the Tribunal to the Adjudicating Authority was only for the purpose of computation of figures of such cenvat credit. The Revenue does not dispute before us the entitlement of assessee to avail such cenvat credit. In these circumstances, the finding of the learned Tribunal that the case would not call for any imposition of penalty, which was found to be unwarranted on account of interpretational issues involved it cannot be beyond the scope of power of the learned Tribunal under Section 35C of the Act. So long as the question of entitlement of Assessee to avail such cenvat credit is not validly disputed or questioned by the Revenue, which in the present case has not so been done, the Revenue cannot insist upon a open remand for leaving the question of penalty of imposition also free to be reconsidered by the Adjudicating Authority - there is no illegality committed by the learned Tribunal in this regard and therefore, we find the present appeal by Revenue being without any merit. The questions are answered in favour of the Assessee and against the Revenue - Appeal dismissed.
Issues:
1. Imposition of penalty by the Tribunal while remanding the case for computation of cenvat credit. 2. Interpretation of Section 35C of the Central Excise Act, 1944 regarding the Tribunal's powers. 3. Dispute over the entitlement of the Assessee to avail cenvat credit. 4. Application of penalty provisions under Section 11AC of the Act. Analysis: 1. The High Court addressed the issue of the Tribunal setting aside penalties while remanding the case for cenvat credit computation. The Tribunal found the penalties unwarranted due to interpretational issues and remanded the matter to the Adjudicating Authority. The Revenue argued that penalties should be left for the Authority to decide. However, the Court upheld the Tribunal's decision, stating that it was within the Tribunal's powers under Section 35C to set aside penalties based on the circumstances. 2. The Court analyzed the powers of the Tribunal under Section 35C of the Central Excise Act, 1944. It noted that the Tribunal has wide discretion to pass orders as it deems fit, including remanding cases with specific directions. The Assessee's counsel argued that the Tribunal's decision on penalties was valid under this provision. The Court agreed, emphasizing the Tribunal's authority to make such determinations. 3. The dispute over the Assessee's entitlement to cenvat credit was a key issue. The Tribunal allowed the Assessee to avail the credit based on various judgments. The Revenue did not challenge this entitlement. As a result, the Court affirmed the Tribunal's decision on the Assessee's entitlement to cenvat credit, as it remained undisputed. 4. The Court examined the application of penalty provisions under Section 11AC of the Act. The Revenue relied on a judgment regarding penalties for deception by the assessee. However, as the Revenue did not dispute the Assessee's entitlement to cenvat credit, the Court found no deception or deliberate wrongdoing by the Assessee. Therefore, the Court dismissed the Revenue's appeal, ruling in favor of the Assessee and against the imposition of penalties. In conclusion, the High Court upheld the Tribunal's decision, emphasizing the Tribunal's powers under Section 35C and the undisputed entitlement of the Assessee to cenvat credit. The Court dismissed the Revenue's appeal, finding no grounds for imposing penalties in this case.
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